Denver-based MassRoots, the popular social network for cannabis enthusiasts, failed again to secure a public listing on the Nasdaq, a setback for marijuana companies hoping to trade on a major U.S. stock market.
MassRoots said in a press release the Nasdaq linked its decision to the argument that the company, as a pro-marijuana business, could be considered as aiding and abetting the distribution of a federally illegal substance.
“With this decision, the Nasdaq has set a dangerous precedent that will prevent nearly every company in the regulated cannabis industry from listing on a national exchange,” MassRoots CEO Isaac Dietrich said in the release.
“This will have ripple effects across the entire industry, making it more difficult for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States.”
MassRoots first applied to trade on the exchange last August, but failed to meet all of the Nasdaq’s listing requirements.
Most notably, it needed to raise $5 million to meet a shareholder’s equity requirement, but it was only able to secure about $1 million.
Dietrich said MassRoots will to appeal the decision to the Nasdaq’s review panel as soon as the company receives a copy of the denial letter in writing. The company “will not be affecting a reverse stock split unless its appeal from the Nasdaq is granted,” the release said.