Maker of AriZona Tea takes a leap of faith into the cannabis-infused market

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Maker of AriZona Tea takes a leap of faith into the cannabis-infused market

Bethan Rose Jenkins, Cannabis News Writer/Editorial

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Another major drinks producer has joined the “Green Rush” – the creator of Arizona Tea. Arizona Beverages will venture into the legal cannabis market to produce a range of weed-infused gummies and beverages, according to recent reports.

Founded in 1971, the drinks giant has secured a licensing deal with cannabis edibles company Dixie Brands; a company that prides itself on producing a range of decadent handcrafted truffles using pure-extracted THC.

Arizona will benefit from the manufacturing and distribution expertise of Dixie Brands, which will develop a range of products sold under the iced tea brand’s name.

Dixie will manufacture and distribute Arizona’s cannabis-infused products across six U.S. states

Based on the details of the business collaboration between Arizona Beverages and Dixie Brands, Arizona’s range of cannabis-infused drinks will be distributed among Dixie’s licensed dispensaries. Currently, the cannabis edibles company operates pot shops in six U.S. states.

In addition to having their cannabis-infused drinks seen by a large market, the partnership with Dixie gives Arizona the opportunity to purchase a $10 million stake in the Denver-based legal weed company.

“The cannabis market is an important emerging category, and we’ve maintained our independence as a private business to be positioned to lead and seize generation-defining opportunities exactly like this one,” said Arizona’s chairman Don Vultaggio in a statement. “The cannabis category is an ideal space to bring the flavor and fun of Arizona into new and exciting products.”

Arizona has already made its mark in the beverages industry, with the brand’s range of ice tea being sold inside supermarkets and convenience stores such as Walgreens, Walmarts and 7/11. With the drinks giant capitalizing on the cannabis-infused product trend, it is clear that weed is filtering into the mainstream market.

Grandview Research predicts that the non-alcoholic beverages industry is expected to be worth $1.60 trillion by 2025 – just one of the many areas of mainstream retail that has been associated with cannabis as of late. 

Active chemical compounds derived from both cannabis and hemp, such as the non-psychoactive cannabinoid CBD (cannabidiol), are emerging as a must-have product in the health and wellness industries. From face creams to women’s menstrual care products, there’s a lot more to the green plant than getting ‘high’ on its psychoactive cannabinoid THC (tetrahydrocannabinol).

Various other beverage giants are getting involved in the legal cannabis space

Arizona’s announcement of its foray into the cannabis market could have been influenced by various other happenings in the cannabis drinks segment of the market. The major beverages producer has a lot to contend with, but since Arizona is a privately-held company, it gains a competitive advantage over many.

The biggest investment in the cannabis-drinks market to-date was Constellation Brands’ deal with Canadian cannabis cultivator Canopy Growth; a deal that was struck in 2017 for $4 billion. Constellation is the company responsible for developing products for some of the most well-known alcoholic brands, including Corona beer and Negro Modelo.

Then, in August of 2018, another Canadian cannabis producer teamed up with a drinks company. HEXO Corp., which is based in Quebec, joined forces with Molson Coors Brewing to produce a range of non-alcoholic cannabis beverages for distribution in Canada’s legal market. The North American country legalized cannabis completely in 2018, following the passing of the Cannabis Act (Bill C-45).

California drinks company Lagunitas Brewing has also unveiled a cannabis-infused product range. Owned by Heineken, Lagunitas will distribute its sparkling water products throughout select locations in the largest legal weed state in the U.S. 

Cannabis-infused drinks produce longer-lasting therapeutic effects

Although the effects may take longer to kick in than they would if you were to smoke a joint or inhale potent fumes using a dab rig, cannabis-infused drinks produce longer-lasting effects. When ingested, cannabinoids are metabolized in the gut, meaning that the effects won’t kick in until 30 minutes to two hours afterward. Nonetheless, they can last for up to eight hours.

The effects experienced will depend on which cannabinoids are contained in the product. For example, THC has been observed in studies for its neurological effects and anti-emetic properties, whereas CBD has demonstrated anxiolytic and anti-inflammatory potential in various studies.

While cannabis-infused drinks may be a good idea, bioavailability problems present an issue for companies that want to entice their target market. However, making cannabinoids water-soluble could be the answer for companies like Arizona that want to dominate this segment of the industry.

According to an article published by Chemistry and Biodiversity in 2007, CBD’s bioavailability sinks to just four percent when absorbed by the body without solubility. A separate study published in the journal Frontiers in Pharmacology revealed how 31 percent bioavailability was achieved after smoking cannabis.

You can learn more about water-soluble cannabis by reading one of our previous articles on the subject here