Margaritas can't exist without tequila, and tequila can't exist without the blue agave plant. Primarily grown in the area surrounding the town of Tequila in the western Mexican state of Jalisco, the plants produce a sweet nectar, which is harvested, fermented and twice distilled to create the amber or clear liquor. According to Mexican law, only Jalisco and limited regions in surrounding states can produce tequila.