* Distell picks up 20% stake in cannabis brand RETHINK
* Arm of its biggest shareholder Remgro also buys stake
* Investment part of growth strategy, CEO says
JOHANNESBURG, Jan 20 (Reuters) - South African wine, cider and spirits company Distell DGHJ.J will soon be able to offer cannabidiol-infused drinks after taking a 20% stake in cannabis wellness business RETHINK, it said on Wednesday.
Distell's investment gives it access to RETHINK's brand and product range, which includes oils, capsules and teas made from cannabidiol (CBD), a chemical compound found in the cannabis plant that is gaining popularity for uses ranging from relaxation to skin care.
CBD is one of a variety of compounds found in the cannabis plant but studies have found it does not cause a 'high' or produce effects that could lead to addiction, according to the World Health Organisation.
Distell said the investment would help it to benefit from increased demand for cannabis products like CBD.
"The cannabis sector is still in its infancy and primed for growth as legislation to control and legalise certain aspects of usage is developed," Distell CEO Richard Rushton said in a statement, adding that the investment was in line with its strategy to explore new expansion opportunities.
The price for the stake in RETHINK, created by herbal and organic pharmaceuticals firm Releaf Pharmaceuticals, was not disclosed. Invenfin, the venture capital arm of Distell's largest shareholder, Remgro REMJ.J , also took a 20% share in RETHINK.
Distell and Invenfin said their partnership with Releaf Pharmaceuticals could produce a range of CBD brands and market leadership both in South Africa and other major markets. Distell said this included but was not limited to CBD-infused drinks.
Distell is currently grappling with the impact of a ban on alcohol in South Africa, the third to be implemented since March last year as part of coronavirus restrictions. But hefty investments made in prior years have helped its recovery, it said last year. has been legal to sell CBD products in South Africa since 2019.
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