Arizona Iced Tea Is Pivoting to Weed and That’s Just the Beginning
Credit to Author: Alex Norcia| Date: Thu, 08 Aug 2019 13:07:59 +0000
Arizona Iced Tea, as Eater once noted, has “always been cool.” The company produces the tallboy of iced teas, almost always for 99 cents a pop, the aluminum cans coated in so many distinct patterns and fluorescent colors that they stick out in refrigerators at the CVS or the local corner store or the gas station like no other. They are remnants of the 90s, of an optimistic decade long gone, but they’re still around in most of the same forms. For millennials, the product has seemed to grow up with us. It made Arnold Palmer and golf cool before we ever accepted the sport wasn’t lame. In May, for the opening of his new Mission Chinese Food in Brooklyn, emo chef Danny Bowien even built a menu around the brand.
Now, according to the Wall Street Journal, you may soon be able to down an Arizona Iced Tea and get stoned all in one gulp. The Woodbury, New York–based beverage titan has penned a licensing deal with Dixie, a prominent cannabis company in Denver, that could eventually produce weed-infused drinks.
The move—still in its early stages, and pending Dixie’s board’s approval—is, in many ways, a preemptive strike. It’s a bet, much like predicting a stock, that mainstream brands with nostalgic appeal and cannabis will have an intimate future, experts said, one that could be just the start of a flood of corporate pivots to weed.
“It’s probably one of the best-known brands in the cannabis space, and a huge brand in beverages, getting together,” said Sam Kamin, a professor of marijuana law and policy at the University of Denver. “It’s huge.”
So while Pop-Tarts and Go-Gurt have not yet flung into this space, more and more brands are likely heading in that direction.
“From a branding perspective, we definitely do see the trends in mainstream culture correlate to how products are marketed and positioned in cannabis as well,” said Jon Lowen, a co-founder of Surfside, which helps its clients advertise their cannabis products. “Pulling from the nostalgia of the 80s and 90s definitely resonates with Gen X and early millennials.”
Nam Tran, the brand manager of GoodFellas, a cannabis-focused creative, branding, and sales agency, made a similar point. “This is, of course, going to happen,” he said. “Cannabis has only been legal in some states for a few short years and a good portion of the customers are new users or users that haven’t used in years. Those customers don’t know what cannabis brand to trust, but they do trust brands in other industries.”
Arizona, though, is really the first of its kind to launch into this sphere, and the one that can set a potential precedent for what lies ahead. That is: if you don’t count alcohol. Last year, the owner of Corona beer spent $4 billion to increase its stake in a cannabis company, and Heineken’s California-based Lagunitas brand—perhaps best known for its totally fine IPAs—recently created a sparkling water spiked with cannabis.
Still, the logistics of distributing such a product are uniquely thorny, in that you can’t make a product like weed-soaked Arizona Iced Tea and transport it (in bulk or otherwise) legally across state borders.
“Dixie is licensed in a number of states, and these products would have to comply with regulations in every state that they’re sold,” Kamin said. “Arizona Iced Tea is going to have to adjust to a situation where it’s making the product in the state where it will be sold, and that’s certainly a different economic model than most beverage companies are familiar with.”
Naturally, there are other potential setbacks to the inevitable commercialization, even if it makes perfect economic sense. Among them, in the view of Robert MacCoun, a professor of law at Stanford University, is that it might increase the number of consumers.
“Arizona Beverage Company is making a perfectly sensible decision when considered purely as a business decision,” MacCoun wrote in an email. “But one doesn’t have to be a ‘reefer madness’ hysteric to ask, ‘Hmm, a refrigerator full of reefer drinks on a hot summer day—what could possibly go wrong?'”
Nonetheless, the laws around these kinds of corporate partnerships are clearly loosening. In May, Colorado Governor Jared Polis signed legislation that allows a publicly traded company, or outside investors, to buy into up to two cannabis companies in the state.
“You have states like Colorado realizing they’re going to lose capital to places like Canada, where this is fully legal, trying to attract capital,” Kamin said, “and you see the legislature at least anticipating deals like this being done.”
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This article originally appeared on VICE US.