In this song, Hagar sings about a trip to Baja, Mexico, where he has some good times while enjoying some shots of his favorite beverage - his "Vitamin T."
Hagar was serious about his tequila: In 1996 he founded Cabo Wabo tequila, which was served in his bar (also called Cabo Wabo) in Cabo San Lucas, Mexico. It was good stuff, made by a family in Mexico that had been doing it for generations. When Hagar had it imported to the United States, it became a popular premium brand.
In 2007, Hagar sold 80% of the company to Campari for a cool $80 million; he sold them the rest of his stake in 2010 for another $11 million.
The line, "She did a mean Macarena to the Funky Cold Medina" is a reference to two hits from the '90s: "Macarena" by Los Del Rio and "Funky Cold Medina" by Tone Loc.
Hagar doesn't mention his Cabo Wabo brand in this song, which kept him in accordance with various broadcast regulations that keep artists from promoting their products.