The company behind Arizona Iced Tea is getting into the market for marijuana-laced gummies and drinks in the U.S. and Canada, seeking new avenues for growth after losing ground in its core tea business.
Arizona Beverage Co. has reached a licensing deal with Dixie Brands Inc.
, a Denver-based cannabis company that makes and sells weed vaporizers, candies, drinks, tinctures and topical creams in five U.S. states. Under the agreement, Dixie will manufacture the products and sell them through licensed dispensaries. The deal, which is subject to approval by Dixie’s board, also gives Arizona the right to buy a stake of up to $10 million in the cannabis company.
Plans for the Arizona line are in the early stages. It is likely to start with vape pens and gummies, followed by a variety of beverages that could include tea, lemonade, soda, coffee or seltzer, officials said. Dixie intends to launch the line in the U.S., then expand it to Canada and Latin America.
Arizona, a privately held company, is hoping to get a head start in the U.S. cannabis market over big, publicly traded beverage makers that are taking a more cautious approach. Companies including Corona brewer Constellation Brands Inc.
and Coors Light brewer Molson Coors Brewing Co.
are developing marijuana-laced drinks in Canada but waiting for cannabis to be federally legal before bringing them to the U.S.
An expanded version of this report appears at WSJ.com.
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View more information: https://www.marketwatch.com/story/arizona-iced-tea-maker-getting-into-marijuana-market-2019-08-07