Years ago I came across an article suggesting that, by nature, some animals are attracted to the sensation of being high. Pygmy sloths in Panama are believed to be addicted to a certain moss that grows on red mangrove leaves. They will eat no other leaves from any other trees. The moss was examined and discovered to have similar effects to Valium. Dolphins purposely ingest a nerve toxin from puffer fish which makes them high. And just look at us humans, our modern western society can't even function without drugs. Hylians likely also depend on drugs, at least during the timeframe of Ocarina of Time it seems like drug use is in full swing.
Potions actually are drugs, they are the equivalent to modern pharmaceutical drugs in reality, I assume. The Potion Hag looks pretty spaced out, probably from inhaling all those fumes coming off the potions. Grog looks like he is high, and perhaps he needed the Odd Potion, derived from Forest Mushrooms, as a detox so he could sober up. An alternative theory, maybe the Odd Potion is a very powerful drug he needs to curb an addiction and avoid symptoms of withdrawal? Moving on, the owner of the Bombchu Store in Hyrule Castle Town looks high, he's pretty mellowed out and is just jamming. The Hylian Master Fisherman might be a recovering drug addict. I've heard of people addicted to Heroin, Meth, and Crack developing involuntary twitches and itches, and it will persist even long after they stop using the drug.The Running Man never sleeps, he runs all day and stays awake all night. He must be using some sort of drug based with amphetamines. And the Magic Beans Salesman eats the beans nonstop, like he is dependant on them. Eventually he will even stop selling them all together even though he has more. Just in general, many of the characters look like drug users in Ocarina of Time. I especially liked the theory written by a fellow Zelda Dungeon Forum member, Deus, about the Lakeside Chemist running a Meth Lab.
In that thread we brought up points I will also bring up in this thread.
When Link wakes up as an adult, Ganondorf froze over Zora's Domain and the water level of Lake Hylia receded. There is still flowing water in Hyrule coming from the area where Jabu-Jabu once was. It doesn't seem like many Hylians were drinking water anyway. The drinks of choice were Lon Lon Milk and Potions. In Kakariko Village, the Well dried up, and while Link was a child it wouldn't have been a good water source anyway because the bottom of the well is full of decaying bodies, and in the deepest part the water is actually poisoned.
Now here's a far-fetched suggestion, but I'll add it anyway. Ganondorf may have capitalized in the milk industry. This may even be why he didn't kill all the Hylians in Kakariko Village, surely he knew they all took refuge there. Instead he kept them alive to make profit. He banished Talon from Lon Lon Ranch, and gave the ranch to Indigo. Together it looks like they had a strong grip on Hyrule. Indigo would make and sell fermented milk, and Ganondorf would receive a portion of the profit. But Talon had the milk's alcohol content stronger, so it was liked better when he was running the ranch. Indigo probably isn't giving it enough time to ferment properly in an attempt to make fast money. I feel I must point out this fact that Deus shared.
“I have heard in some African countries milk is fermented. If this is true for Lon Lon milk it could be the alcohol the people are addicted to.” - Deus
I looked into this, and it's true. In Africa milk is fermented and called "Amasi". Although it happens in Majora's Mask, we see Indigo's Terminian counterpart, Gorman, get drunk drinking milk. Plus Latte is even stated as a Milk Bar, and is a members only, adult oriented establishment.
With potions, while they might be manufactured for medicinal purposes, the highs they give are probably an effect nobody is objecting to. If water really isn't being drunk, than milk really is the main source of hydration in Hyrule. And since it's being fermented, getting hammered is an effect the Hylians also won't be objecting to. In fact, in reality, during Antiquity, water wasn't even the primary source of hydration either for our ancestors. It was too risky to drink water, up until the Greeks invented methods of purifying it. Wine was the primary source of hydration.
Hyrule during OoT is still in a medieval like era. Keep in mind that restrictions on certain drugs and on alcohol didn't even begin to occur, in reality, until the last century. And even now there are still drugs without any restrictions whatsoever on them, caffeine being the most prominent that comes to my mind. So Hyrule may be a long way off from restrictions on drugs and alcohol, or even from realizing the negative aspects of drug and alcohol use. Even the learned experiment with drugs, knowing full and well the possible dangers. In reality, Albert Hofmann, a Swiss scientist, created LSD in the 1930's. In the 1940's he unintentionally got some of it on his hands and ended up putting his hand near his nose, and ingested a small amount. Throughout his entire life he admitted to "microdosing" LSD, and he was still doing it in the last few months of his life reportedly. He denied firmly that LSD was addictive, but of course it is. Sigmund Freud, the famous Austrian neurologist, was addicted to Cocaine. Just about every renowned intellectual figure has admitted to using drugs (and in some cases they claimed it was drug use that made them "more intelligent". Francis Crick, the legendary microbiologist, stated that he perceived the double helix shape while high on LSD). That considered, I wouldn't look for the Potion Hag or the Lakeside Chemist to try bringing awareness to substance abuse, they have their own addictions to deal with.
We can't shake our heads and say, "Shame on you Hylians!" Because really the substance abuse problem in Hyrule reflects our own in reality. We're in that same boat, slightly ahead, but not by much. Honestly, I just wrote this fueled by caffeine. Nothing like Coca-Cola to spark theorizing.