Dietrich went on to say that if MassRoots were a social media app for alcohol or tobacco, there’d be no problems.
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Although cannabis remains classified as an illegal narcotic under US law, it has been legalized for medical use in 23 states since California became the first to do so in 1996.
“With this decision, we believe that the NASDAQ has set a risky precedent that could prevent almost every company in the regulated cannabis industry from listing on a national exchange”, MassRoots CEO Isaac Dietrich insisted in the company’s statement.
As soon MassRoots receives the denial letter, Dietrich says, the company plans to appeal the decision to the Nasdaq Listing and Hearings Review Panel.
A Nasdaq official called MassRoots CEO Isaac Dietrich and his attorney Monday to let them know the exchange planned to deny the application, which was made in August and supplemented with a filing of paperwork last month to execute a future underwritten secondary offer, Dietrich said.
“With this decision, the Nasdaq has set a risky precedent that will prevent almost every company in the regulated cannabis industry from listing on a national exchange”, Dietrich said in a press release. Such statements, estimates and projections may constitute forward-looking statements within the meaning of the federal securities laws.
“This (will make) it more hard for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States”, Dietrich.
MassRoots, which launched in 2013, models itself as a Facebook for pot users.
“We were told we had an opportunity to withdraw our application and not have to disclose that it was denied”, Dietrich said in an interview with The Denver Post.
Now trading with a market cap of $32 million, there were a lot of momentum players positioned in MSRT hoping for the Nasdaq listing to occur. “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”.
Dietrich is taking the development in stride.
“Right now, on the OTC, a significant portion of investors are unable to trade our stocks … and the institutional investors tend to stay away from the OTC”, he said. One key differentiator is that these companies are testing with the Food and Drug Administration and making products for medical marijuana and MassRoots is focused on recreational marijuana users.
“Our general philosophy is that we need to be as productive and creative as possible, every day”, he said.
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We’ve reached out to Nasdaq for comment.
