A company that has grown significantly since its start in 2013, MassRoots has become one of the biggest successes of the cannabis industry to date. The social network is geared around cannabis users, offering them a way to find like-minded individuals in their area, talk to others about growing the plant or cooking with cannabis – and it’s only available to those who live in one of the 24 states with legal medical marijuana (which includes those with a recreational industry).
Despite only being open to less than half of the country, there are already 900,000 registered users on MassRoots and that number just keeps going up. If you’re new to the medical marijuana program or just moved to a state where toking is legal, MassRoots is probably the best way to find the best dispensaries and best strains in your area – as well as a good way to meet new people. This popularity has lead them to be worth over $40 million.
Unfortunately, being a part of a growing industry that defies the laws of the federal government, there have been and will continue to be snags along the way. The most recent was this past week when MassRoots CEO Isaac Dietrich received a call from NASDAQ, a national stock exchange, informing him that their application was being denied. According to Dietrich it was being denied because their platform could be seen as aiding the distribution of an illegal substance.
While NASDAQ offered Dietrich the chance to withdraw the application himself so that a denial of the application would not have to go public. Instead, Dietrich asked for them to send him the formal rejection letter – that way he could file a formal appeal. Once off the phone he sent out an e-mail to MassRoots users and some others explaining why their application had been denied. NASDAQ has made it clear that they do not comment on denied applications.
“With this decision, we believe that the NASDAQ has set a dangerous precedent that could prevent nearly every company in the regulated cannabis industry from listing on a national exchange,” MassRoots CEO Isaac Dietrich insisted in the company’s statement. “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.”
In the long run, Dietrich is more worried about the effect this will have on the cannabis industry as a whole, rather than the effect on his individual company. The industry is stunted in some ways because of a lack of means for funding, outside of billionaires who are prepared to invest. Access to traditional loans and credit are off-limits to cannabis based businesses and over the counter stocks are not as efficient as a national stock exchange.
Other than the fact that MassRoots is a part of the cannabis industry, they were qualified according to the requirements of NASDAQ; which requires a minimum $4 million in stockholder’s equity, a market value of at least $5 million, more than 300 shareholders and “market-maker” brokerages. All in all, they were denied access to this national stock exchange for one reason and one reason only – they go against the federal government’s standpoint on marijuana prohibition, whether the industry is currently legal in 24 states or not.