MassRoots, an online social network for marijuana fans, experienced a massive downer Monday when the NASDAQ exchange denied its listing request based on the fact cannabis is still illegal at the federal level.
According to a statement from MassRoots, a company that is currently trading over the counter, the exchange request was denied due to concerns over aiding and abetting the distribution of an 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,” said MassRoots chief executive Isaac Dietrich in a prepared 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,” he added. “This decision must not be allowed to stand and we're asking every cannabis investor, business, activist and supporter to write a brief note to the Nasdaq in support of our appeal here.”
MassRoots, which
applied for the listing in early April, plans to appeal the exchange's decision.
MassRoots was also planning a reverse stock split if it was listed on the exchange.
The stock is trading at 90 cents a share, down 42.7% from April 11 when it
applied to be listed on the exchange. The stock is down 18.2% since the start of the year.
The S&P 500 Index is flat from April 11, and up 1.1% since the start of the year.
So far, 40 states have legalized the use of medical marijuana in some form, and four have legalized marijuana for recreational use.
Even though the Department of Justice has extended for a second year through the end of 2016 a
“cease fire” of federal marijuana-law enforcement over state laws, those states are still in technical violation of federal law. That is the kind of reality that has a lot of financial advisers placing pot stocks on the extreme end of the risk curve.
