The brand Arizona Beverage is entering the cannabis industry. The company recently announced that it had reached an agreement with Dixie Brands, which manufactures and sells drinks, chocolates, jelly candies and topical creams containing cannabis. As part of this partnership, Dixie, which operates in six U.S. states, will manufacture and distribute products bearing the brand name. The products will be sold in approved dispensaries.
However, as a private company, Arizona Iced Tea may encounter some difficulties. Indeed, although cannabis is legal for recreational use in 11 states and medical use in more than 30 states, it is still prohibited by federal law. This means that products cannot be transported beyond the borders of each state, which poses packaging and distribution problems. However, under the agreement, Dixie would manufacture the products in the states where they are sold.
“Cannabis is ideal for combining Arizona’s flavor and pleasure with new products,” said Don Vultaggio, president of Arizona Beverages in a press release.
Arizona is looking to diversify its products after losing its leading position as a leader in ready-to-drink tea to Pure Leaf, a partnership between Unilever PLC and PepsiCo, Inc. Over the past two years, Arizona has launched new products such as beef jerky and fruit snacks and plans to launch a line of seltzers with fruit juices later this year.