Make the Syrup
In a large jar with a tight-fitting lid, vigorously shake sugar, 2 tbsp. basil and water until the sugar dissolves, about 1 minute. Strain into a pitcher.
Mix the Drink
In a food processor, puree watermelon; strain. Add the watermelon juice (about 2 cups), tequila, orange liqueur and 1 cup lime juice to the pitcher; stir.
Rim the Glass
Pour 2 tbsp. lime juice on a plate. Spread 2 tsp. chopped fresh basil and salt on another plate. Dip the rims of 8 glasses into the lime juice, then into the salt and basil.
Fill the glasses with ice, then add the margarita. Garnish with basil sprigs.