South African Spirits Company Distell Backs Cannabis Brand Rethink

South African wine and spirits company Distell is now in the cannabis industry.

The producer of Bunnahabhain and Deanston Scotch whiskies teamed up with venture capital firm Invenfin to invest in cannabis wellness brand Rethink, The Spirits Business reports.

Under the deal with the owner of South Africa's cannabis brand, Releaf Pharmaceuticals, both enterprises obtained a 20% stake each in the brand.

The sum remains undisclosed.

The partnership is poised to yield a portfolio of cannabis-based brands featuring a wide range of products. 

Rethink was launched back in Oct. 2019, and its products were the first of its type to receive the Cannabis Research Institute's support. The company offers CBD oils, capsules, teas, and skincare goods.

"Our investment into the Rethink brand in partnership with Releaf Pharmaceuticals and Invenfin is a great fit with Distell's strategy to explore new growth opportunities," Distell CEO Richard Rushton said Wednesday.

"We will bring our existing supply chain and marketing expertise to help grow Rethink and collaborate with stakeholders to build this emerging sector with significant economic potential for South Africa."

South Africa As Cannabis Pioneer

South Africa was the first country on the continent to develop a federally approved market for nonprescription CBD in 2019.

CBD products with no more than 20 milligrams per daily dose are currently approved for legal sale in the country.

According to Euromonitor International's data, the global cannabis market is projected to reach $166 billion by 2025.

"The cannabis sector is still in its infancy and is primed for growth as legislation to control and legalize certain aspects of usage is developed," Rushton noted.

Cannabis Beverages – A Trend That's Here To Stay?

Meantime, Distell is not the only beverage firm to enter the cannabis industry. Constellation Brands Inc.'s (NYSE: STZ) (NYSE: STZ) purchase of a stake in the cannabis giant Canopy Growth Corp. (TSX: WEED) (NASDAQ: CGC).

And while alcohol companies are becoming more established within the cannabis space, Canopy's industry peers are scouting for opportunities within the beverage sector.

Over the last year, a number of cannabis businesses have deepened their benches by welcoming beverage experts into its ranks, including MediPharm Labs (OTCQX: MEDIF), Mydecine (PINK: MYCOF), and Red White & Bloom Brands Inc. (OTC: TDRYD), to name a few.

In addition, many cannabis businesses recognized beverages as the future of the pot sector and kicked off the production of their own drinks, including Canopy Growth, Tirlay Inc. (NASDAQ: TLRY), BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) and Hexo Corp. (TSX: HEXO) (NYSE: HEXO).

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