The Nasdaq has denied the application of MassRoots, the social media platform designed for cannabis enthusiasts, to have its shares listed and traded on the stock exchange, according to a Denver Post report.
MassRoots CEO Isaac Dietrich said he has asked for a written denial instead of voluntarily withdrawing the application and plans to appeal to the Nasdaq Listing and Hearing Review Council and, if necessary, to the Securities and Exchange Commission.
Currently MassRoots is traded “over the counter,” (OTC: MSRT) subjecting them to less stringent regulations than the “big league” exchanges. Yesterday, the same day the rejection was announced, those shares dropped more than 18 percent, closing at 74 cents. Their all-time high was $2.59 on April 21, 2015.
Dietrich said Nasdaq officials seemed hesitant about allowing MassRoots onto their exchange during a meeting last month.
“I don’t think they want to be trailblazers on this,” he said.
The market requires specific financial liquidity criteria which also includes language that allows them to block a listing “if necessary to protect investors and the public interest.” Dietrich says there is some hypocrisy at work if his application is being denied because his business is marijuana-centric. British bio-pharma firm GW Pharmaceuticals is currently listed on the American exchange and its cannabis-derived epilepsy and multiple sclerosis drugs are being considered for Food and Drug Administration approval.
“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,” Dietrich said in the Denver Post report. “It would’ve been a tremendous victory for the entire industry.”