Distell has bought a 20% stake in a SA producer of dagga-based oils, teas and skincare items. Distell is a top producer of spirits, wines and ciders and owns popular brands like Savanna, Hunter’s, Klipdrift, Sedgwick’s Old Brown, Nederburg and J.C. Le Roux.
Distell’s decision to invest in the marijuana market comes as South Africa’s lockdown prohibition laws continue to cripple the liquor industry, thus affecting the company significantly. Distell reported that its domestic sales fell by almost a fifth from January to August 2020. This was especially due to the alcohol ban. It lost about 100 million litres in sales volumes and an estimated R4.3 billion in revenue due to the lockdown.
The company has invested in RETHINK, a local brand which produces a wide range of dagga-based products, including CBD oils, teas, and skincare items. Cannabidiol (CBD) is a chemical compound found in the cannabis plant both in the hemp and marijuana varieties. South African law allows CBD products, not exceeding 20mg per daily dose, to be sold.
Distell’s debut in the marijuana business is expected to fast-track legalisation of dagga in the South Africa. The company is looking to contribute its expertise in distribution and marketing as part of the new acquisition.
South Africa’s , As per the Department of Trade and Industry and the Agricultural Research Council, South Africa’s dagga industry is worth R14 billion and is expected to rise to R28 billion by 2024.
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