MassRoots, a marijuana industry company, requested to trade shares on the NASDAQ exchange. The Denver-based startup had high hopes of becoming the first marijuana industry company on the exchange. But on Tuesday, May 24th, MassRoots learned its request was rejected.
NASDAQ viewed adding MassRoots as “aiding the distribution of an illegal substance,” reported CNN. Co-founder of marijuana-based business, Isaac Dietrich, says the rejection is a “dangerous precedent” and prevents legal marijuana companies from displaying a presence on national stock exchanges.
Dietrich is quoted as saying, “This [will make] it more difficult for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States.”
MassRoots is already listed on a smaller exchange with the ticker MSRT. According to Dietrich, the market cap for MassRoots is $40 million. The startup also has above 300 shareholders on alternative exchanges.
MassRoots was given an option to either withdraw the application to keep the rejection private or allow for it to be made public knowledge. Dietrich said in response, “But we want his to be made public because it sets an important precedent.”
NASDAQ commented only that it does not make public commentary on any rejected applications