1. In a small saucepan, combine the sugar and water over medium-high heat. Bring to a simmer and cook until the sugar has dissolved, 2 minutes. Remove from the heat and add the chamomile leaves. Let steep until the syrup has completely cooled, then strain.
2. In a pitcher, combine the 2 ounces of the syrup with the watermelon juice, lime juice and ice. Stir to chill, then divide between ice-filled glasses. Garnish with watermelon wedges and serve.