Every culture that distills alcohol infuses it with the local fruits, herbs and flowers available. In Italy, there's Benedictine and Galliano and a million amari; in Germany, schnapps is made with everything from tree bark to rare mountain flowers gathered by virgins in dirndls. They started off as medicine, and worked their way onto the shelves of bars not long after.
Baja doesn't have wormwood, Alpine flowers, or virgins in dirndls (well, except that German restaurant in Mexicali, but I digress), but they do have damiana. Damiana (say "dah-MYAH-nah") is the common name for Turnera diffusa, a bushy weed distantly related to passion fruit that grows wild all over the peninsula, but mostly in Baja California Sur. It produces little tiny leaves and bright yellow flowers, which are picked and infused into neutral spirits.
Most of the damiana sold in Baja California is Guaycura brand, which comes in a... hmm... distinctive bottle featuring hips and a prominent pair of breasts. It's meant to be a pregnant goddess of fertility, but if you buy this, you are going to have some explaining to do, both to your wife, and to your 13-year-old son.
Despite the crass bottle, the liqueur has an intensely floral, chamomile taste and an almost gin-like aftertaste. It's also cloyingly sweet--far sweeter than most liqueurs you'll find in bars. The herb produces a calming effect, but that's not why it's so popular. Damiana is one of the few claimed aphrodisiacs that actually works. Science is still trying to figure out why--the current theory is that it's an aromatase inhibitor that reduces estrogen and increases testosterone--but it does work. (It's not Viagra. Don't get your hopes up. The spammers are still lying to you.)
Baja folklore has it that the original margarita was made not with triple sec, but with damiana. I don't buy it for a second--"margarita" is the word for daisy, and a daisy is an old cocktail made with spirits, lemon juice, curaçao and simple syrup. Add in some linguistic confusion (the large green Persian "limes" we use here are called "limón verde" in Spanish) and it's a much more satisfying explanation.
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It does work nicely in a margarita, giving it a floral flavor missing from the orange-y standard recipe, but damiana works best in recipes that call for similarly herbal concoctions like yellow Chartreuse or Benedictine, such as a Widow's Kiss (applejack, Benedictine and damiana) or a Gipsy (vodka, damiana and Angostura bitters). Just be aware that its aphrodisiac effects are muted when it's mixed. You have to drink it straight for best effect. (If you can get your hand on damiana tea, that's even better--but it's not alcoholic.)
Oddly, damiana and its derivatives are illegal in Louisiana; they're concerned about legal "highs". I've drunk half a bottle of the stuff and I haven't felt "high", just... uh... you know what, never mind.
Damiana is available in most large liquor stores, including Leyva's Liquors, on Av. Revolución between 6th and 7th Streets in Tijuana. It's also available in very well-stocked liquor stores on this side of the border, like Hi-Time Wines in Costa Mesa or Beverage Warehouse in Marina del Rey.