Step 1: Prepare Watermelon Puree. Place the cubed watermelon into a blender. Blend until completely smooth, about 30-60 seconds. For a smoother margarita, strain the watermelon puree through a fine-mesh sieve into a pitcher, pressing down on the solids with the back of a spoon to extract all the liquid. Discard any remaining pulp. You should have approximately 2 to 2.5 cups of strained puree.
Step 2: Prepare Glass Rims (Optional). On a small plate, spread a thin layer of coarse salt, sugar, or a mix of both. Moisten the rim of each margarita glass or tumbler with a lime wedge, then dip the rim into the salt/sugar, rotating gently to coat evenly. Set aside.
Step 3: Combine Ingredients. In the pitcher containing the watermelon puree, add the fresh lime juice, Tequila Blanco, and 2 tablespoons of agave nectar or simple syrup.
Step 4: Taste and Adjust. Stir all ingredients well to combine. Taste the mixture and add more agave nectar/simple syrup (up to 4 tablespoons total) or lime juice if desired, adjusting to your preferred level of sweetness and tartness.
Step 5: Serve on the Rocks. Fill your prepared glasses with ice. Pour the watermelon margarita mixture over the ice. Garnish each glass with a fresh lime wedge or a small watermelon slice. Serve immediately.
Step 6 (Optional for Frozen): For a frozen watermelon margarita, combine the watermelon mixture (from Step 4) with about 2-3 cups of ice in a blender. Blend until smooth and slushy, then pour into prepared glasses and garnish.