Arizona Beverage Co., the maker of Arizona Iced Tea, is joining the cannabis market by partnering with Denver-based cannabis producer Dixie Brands Inc.
Dixie Brands manufactures cannabis tinctures, drinks, vaporizers, candies, and topical creams. The weed company currently sells these products in five states.
According to a report by The Wall Street Journal, Arizona will start its foray into the cannabis industry by making vape pends and gummies. This will be followed by making beverages that may include tea, soda, coffee, lemonade, or seltzer. Dixie will then start selling these products in the United States before transitioning to Latin America and Canada.
Don Vultaggio, Arizona chairman and CEO, said that they have to be willing to try things. The upside, he said, is that they are “one of the first ones in an emerging space.”
The WSJ report pointed out that Arizona is looking for new avenues of growth as its main tea-making business continues to decline. The company, which is still the leading ice tea brand in the U.S. in terms of sales volume, has seen its market share decrease in the last few years.
Now, Arizona is clearly hoping to be one of the first beverage makers to officially enter the cannabis market.
There are already other beverage companies that have joined the cannabis bandwagon earlier.
In fact, a number of beermakers have already started developing cannabis-infused drinks. For one, there’s Constellation Brands Inc., the maker of Corona and Ballast Point beers, which has invested $3.8 billion in Canadian cannabis company Canopy Growth. There’s also multinational brewing company Molson Coors Brewing Company.
Even Coca-Cola was reported to be considering penetrating the cannabis market and to be in talks with cannabis producer Aurora Cannabis. However, this was quickly dismissed by the softdrink giant.
All these cannabis beverage business does not come as a surprise considering that analysts are projecting cannabis-infused drinks to become a $600-million market in the U.S. in four years. As such, experts are expecting cannabis beverages to outpace the growth of other categories for retail cannabis-based products.