Begin by making a simple syrup. In a small saucepan, bring water, sugar, and orange zest to a boil, stirring constantly. Simmer for about 3 minutes. Remove from heat. Remove orange zest. Allow to cool completely.
Place watermelon, tequila, Cointreau, lime juice, simply syrup and ice into a blender. Pulse until pureed.
Put a small amount of salt (or sugar) on a saucer. Rub the edge or your glass with a lime wedge to moisten. Lightly dip the rim of the glass into the saucer to rim. Tap off excess salt (or sugar).
Pour your margarita mixture into your rimmed glasses and garnish with a lime slice.
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