Rolling Millions: Who is really behind the never-ending commercials for medical cannabis

It's hard to miss the aggressive collection of commercials Rainbow and Network in recent weeks for EPM, a company that develops cannabis-based drugs.

And not by chance, since they are invested in the venture.

Is this precedent at all just a promo for the business model of next-generation television.

Walla!

Brenze with (some) of the answers

David Wertheim

30/03/2022

Wednesday, March 30, 2022, 12:30 Updated: 12:47

• Share on Facebook

• Share on WhatsApp

• Share on Twitter

• Share on Email

• Share on general

• Comments

  Comments

In simple Hebrew: Keshet and Reshet call on the public to invest in an offering that they themselves will benefit from - in exchange for an allotment of shares in the company

Anyone who has watched Keshet and Reshet channels in recent weeks can not miss the collection of commercials in which former Hadassah CEO and company president Prof. Zeev Rothstein called on the public to invest in EPM, which develops synthetic cannabis. - Even before the clinical trials and medical approval phase , in the

advertisement, alongside Prof. Rothstein who is known to the public as a medical and authoritative figure, EPM CEO and founder Reshef Suissa also talks about the company and its potential.

"Especially now that health is the most sought-after product, EPM is developing a new generation of drugs that, according to pre-clinical experience, have the least expected side effects."

The face of the company, Rothstein, adds: "We use advanced technologies based on the unique potential found in the cannabis plant, and with their help we are looking for solutions to many diseases."

According to a publication in The Marker, EPM published a prospectus in February, according to which it intends to issue 11% of its shares at a value of just under NIS 400 million, and to raise NIS 44 million for the fund (which has an accumulated loss balance of $ 15.45 million).

In the same publication, the question also arises as to how a small company operating in the field of research and development, with no revenue and with a deficit, finances media valued at tens of millions of shekels.

The answer is also in the prospectus.

It turns out that the network will hold 0.79% of EPM shares, and Keshet will hold 2.62% of the shares.

In fact, EPM is going out to issue in a precedent-setting manner - fundraising and an advertising contract of NIS 13 million in Keshet and Reshet.

Or in simple Hebrew: Keshet and Reshet call on the public to invest in an offering that they themselves will benefit from - in exchange for an allotment of shares in the company.

More on Walla!

Four CEOs in three years: What (or who) is behind Ben Tal leaving the network?

To the full article

More on Walla!

• Keshet's fundraising campaign;

  "All means are kosher, including breaking the market"

• The media faced a glorious collapse, and then came the unicorns

• Rainbow and Network's Millions Industry: How much will you pay for an interview with a news reporter?

• Four CEOs in three years: What (or who) is behind Ben Tal leaving the network?

• Natural and home treatment for knee pain - with reimbursement from the health insurance fund

Showcase.

EPM President Prof. Rothstein (Photo: Screenshot, Screenshot)

Why the move is not compatible with the other authority

Industry source: "Tomorrow, anyone who wants to encourage mass recruitment will be able to secure shares for the broadcasters in exchange for a record exposure that will raise billions from public funds without any supervision."

This is not just a precedent, but one that raises quite a few questions both at the regulatory level, and regarding the nature of the future advertising market on television and the models that these days establish broadcasters, who have long considered not only broadcasters, but - as written in Walla!

Brenze quite a few times - the screen is seen as a tool, one of many kinds, for the realization of the group's business strategy.

Indeed, the model raises quite a few eyebrows and criticism, both in the capital market, but also in the advertising industry.

An industry source tells Walla!

Brenze: "Tomorrow anyone who wants to encourage crowdfunding will be able to secure shares for the broadcasters in exchange for a record exposure that will raise billions from public funds without any supervision. Today it is cannabis, and tomorrow it is any other entity that will offer shares to the broadcasters."

Although sometimes there are three advertisements in the Prime Time files, this along with marketing content articles on the Mako website, from a Walla!

Brenze indicates that the move is not at all compatible with the other authority.

But it is doubtful that coordination would have changed anything, since the law does not address the issue at all and the websites are not monitored at all.

In fact, the PA's disqualification rules include only two basic conditions: 1) A franchisee will not broadcast an advertisement that conveys a message on a politically, socially, publicly or economically controversial issue.

2) A franchisee will not broadcast an advertisement that is claimed or implied in it, in any way, that the advertised product or service has a feature or quality that is unfounded.

And what about how to raise funds and contract with advertisers?

Here a loophole is revealed, which intentionally or not, was absent from the kind of legislature.

"right now".

CEO Suissa (Photo: Screenshot, Screenshot)

Increased interest in product exposure

It's not just EPM.

Along with marketing content and strengthening the arm of the sponsored conferences, Keshet has in recent years invested directly in the insurance company Libra and on the Izzy website, as well as in other projects.

On the other hand, Request and Network do not deny that in the current situation where linear TV worldwide suffers from a significant drop in viewing and revenue loss for tech and streaming giants, they are constantly looking for new models for advertising and investment, understanding that the old commercial model is less relevant.

It's not just EPM.

Along with marketing content and strengthening the arm of the sponsored conferences, Keshet has in recent years invested directly in the insurance company Libra and on the Izzy website, as well as in other ventures.

Libra, it will be recalled, began its journey with a media agreement in exchange for a partnership.

And yet, this is an existing company.

Although in its infancy, it exists.

Investing in companies like the ones in which Rainbow and Network is invested may be similar to investing in a startup, but the case of cannabis is different.

The precedent in the EPM model is basically the call for the public to invest in an IPO, albeit not on the stock exchange but as a off-the-shelf product raised directly through the public - but an IPO for all intents and purposes.

Even if this is not a gamble on public money, there is a clear active reading that creates quite a few distortions.

For example, the issue of controlling the separation between content and the advertiser, which in this case becomes much more essential.

According to a source familiar with the regulation, "It is clear that if the person selling the media does not receive money but is directly linked to the IPO, there may be a link between the two that is less healthy, as the network has an increased interest, say in product exposure. "Actually, this will not be reflected. It should be monitored that there is no covert promotion."

Does this mechanism exist?

It is not clear.

Another issue is the possible harm to competition, when both competitors Rainbow and Network are invested in the same company.

The channels responded that this did not require any dialogue or dialogue between them, as each of them negotiated with EPM independently.

"This is a necessary commercial model. The 2022 advertising market is not the 2012 advertising market," says Walla!

Brenze is a senior figure in one of the channels.

Comments

The Second Television and Radio Authority

stated in response that the purchase agreement "Shares for Media" was not coordinated at all with the Authority and that it was not involved in the manner of payment.

It was further stated that "the content of the broadcasts only was approved after consultation with the relevant bodies, with the Securities Authority and the Ministry of Health."

chose not to respond.

• Brenze

• news

Tags

• Rainbow

• Network

• Medical Cannabis