By: First Union
Arizona Iced Tea to Integrate Cannabis
Those responsible for Arizona Iced Tea are now moving toward marijuana. Offering infused gummies and drinks in North American markets, they will seek to expand beyond their currently flagging tea business.
In conjunction with Dixie Brands Inc., a Colorado company that specializes in vaporizers, candies, drinks, and tinctures, the Arizona Beverage Co. will now start to sell their cannabis-based products through certified dispensaries in five states. The negotiations between the two companies also resulted in Arizona having the right to purchase a 10 million dollar stake in the Denver based cannabis company.
The plans for this partnership and Arizona Beverage's new product line are in the early phases yet. Such offerings though could eventually include marijuana-infused lemonade, soda, coffee and of course tea. Initially, though, the endeavor will start with gummies and vape pens. The products will launch in this country and then eventually expand to Canada and Latin America as well.
There are already larger publicly traded companies that are slowly entering the cannabis field, to include such names as Corona, Constellation and Coors Brewing. Arizona is hoping to get out in front of the pack. The CEO and chairman explain their mindset is that "You've got to be willing to try things." Don Vultaggio and his two sons are proud to be among the first to enter this space.
While Arizona is one of the early US-based companies to dive into cannabis-infused drinks, there are still some risks involved with the venture. Even though 11 states have legalized recreational marijuana, cannabis is still federally prohibited. What this means is that it cannot be moved across state lines, nor can cannabis companies list on the US stock exchange. Also, many banks won't accept money gotten from transactions involving marijuana.
With this Dixie deal, Arizona Beverages won't be part of the production as Dixie will be responsible for manufacturing that which is sold in relevant states.
Mr. Vultaggio had been involved in a bitter battle with a former business partner with whom he co-founded the brand. That was settled in 2015; after which, he's tried several things to reinvigorate Arizona and also move into other areas.
Over the past couple of years through Arizona's market share has decreased. In 2013 they were at 23%, whereas today they're only at just over 16%. And last year Pure Leaf took the top spot from them as far as ready to drink teas go. This year sales are steadily increasing from past years. And Mr. Vultaggio has made it known that the demand is currently outpacing their supply; they are therefore going to be constructing a new manufacturing plant beginning next year.
Outside of their future involvement with Dixie and marijuana-infused products, the company has also introduced beef jerky, fruit snacks and is getting ready to roll out fruit juice flavored seltzer later this year.
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