Today it means: The shrub Bixa orellana, which is native to Mexico and northern South America; the arils covering its seeds are a source of the orange-red colourant annatto, and the ground seeds are used in traditional Caribbean, Central American, and South American cuisine. Full definition →
From lipstick + tree, from the resemblance of the open fruit pods of the plant to red lips, or from the fact that the consistency of the arils surrounding its seeds is similar to that of lipstick (see the 1942 quotation).
Etymology from Wiktionary, CC BY-SA 4.0.