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Combine tequila, mezcal, and jalapeño in a jar or bowl. Let stand at least 20 minutes or up to 1 hour. Discard jalapeño. Place watermelon in a pitcher and muddle until broken down. Add tequila mixture, lime juice, and simple syrup. Serve chilled in pitcher or a hollowed-out watermelon over ice garnished with jalapeño slices and lime wedges.