Arizona Iced Tea Jumps into the Cannabis Market in Arizona
Arizona Iced Tea will start with cannabis-infused gummies and vape pens? Huh?
One of our favorite iced tea brands, Arizona Iced Tea, is jumping into the cannabis market with a deal with Dixie Brands out of Denver, Colorado according to the WSJ. At first glance you would assume we are looking at cannabis-infused iced teas and lemonades, right? Not so fast, as the company behind Arizona Iced Tea is going to start out with pot gummies and vape pens. Have no fear about Arizona Iced Tea making marijuana tea just yet, Dixie will manufacture the products and sell them through dispensaries that they already sell products through today. The deal also gives Arizona Iced Tea the right to buy up to $ 10 million of the Dixie Brands company equity.
Arizona Iced Tea market share has fallen over the past 3 years as new competitors like Pure Leaf and Gold Peak have gained market share in the US. In 2013, Arizona Iced Tea had around 24% of the iced tea market in the US, that has dropped to around 16% today.
Arizona CEO Don Vultaggio said, “You’ve got to be willing to try things. The upside is what we’re one of the first ones in an emerging space.”
One question that will be lingering is why is Arizona Iced Tea getting into the cannabis-infused gummy and vape pen space? The obvious product is a CBD or cannabis-infused iced tea. To look further down the line, what does a marijuana-infused gummy made by Dixie with Arizona Iced Teach logo on it look like and taste like? Is this just simply a marketing “white label” situation? Why would you ever use a vape pen (assuming it is disposable) with an Arizona Iced Tea logo?
Would I want to try an Arizona Iced Tea Green Tea with cannabis or maybe a Half-and-Half Arnold Palmer with CBD? Sure. Would I put a white labeled Arizona Iced Tea vape pen? Ummmmmm…
The end game must be cannabis-infused beverages when the Federal law can change. The distribution network that Arizona Teas has access to could be them in the forefront of the cannabis beverage market.
Which begs the next question, are we going to be awash in cannabis drinks that no one really wants or asked for? A recent article on The Verge pointed out that billions is being poured into cannabis-infused drinks that many may not have a taste or desire to try. Huh?
Here is the problem. To consumer alcohol and get buzzed or drunk, you need to drink it. There is no alcohol vape pen (well, technical there is but no adult uses them) and there is no way to eat alcohol to consume it unless we are taking Jell-O shots. So, to get drunk or buzzed you need to drink alcohol as a liquid in one of its many forms.
For cannabis users, we already have many ways to consumer the plant. We can smoke it, vape it, eat it, dab it, drink it, or put it under our tongue as a concentrated liquid. If you are really feeling wild you can even stick it up your rectum for maximum absorption. There are many good cannabis-based liquids on the market in California and Colorado particularly. Have you tried Canna-Punch? It tastes great and has the same effect as eating an edible.
If you look at dispensary shelf space in mature markets like Colorado, Washington, and California, they don’t give much space to cannabis beverages. Why? The products are decent and cost effective. People who are buying weed and the many forms it comes in, aren’t into liquid forms of cannabis as drink. Tinctures outsell cannabis beverages by miles, so we already know what form of cannabis liquid people prefer as far as dosing.
It is always great to see a major brand get behind cannabis as the more money being put in the industry the faster legalization will happen. Sad to say it, but when a ton of rich people invest in something that will go up by 1000% when a law changes, the law tends to change quicker if more rich people invest and put pressure on their representatives to change the law. So, overall this is a great move for the industry and will be a “great headline”, but do we really need more and more cannabis-infused drinks? Current industry trends and a study of dispensary shelf space says no, but time will tell if the general masses will convert to a cannabis beer or ginger-ale when the Federal law changes.
Those are big bets to make when the early studies of consumers are showing the opposite.