Nasdaq, one of the largest stock exchanges in the United States, has put the clamps on one of its newest potential listings, stymying efforts to allow MassRoots, a social networking platform for cannabis users, from being added to the exchange as a tradable company.
The new world of online trading, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
The denial to list on Nasdaq represents a convergence of ideals in the United States, a country that adheres to a nationwide policy of illegal marijuana use at the federal level, despite having twenty-three states allowing it for medical or recreational use. Consequently, Nasdaq had opted to rebuff the listing attempt as it wanted to avoid the stance that could be construed as aiding the distribution of an illegal substance.
What to Look for in a Forex Technology Provider?Go to article >>
The addition of MassRoots to Nasdaq would have been significant, namely as it was hoping to achieve the distinction as the first cannabis company to be listed on the stock exchange. Perhaps of more importance are the ramifications of the decision, which will no doubt provide headwinds for future cannabis entrepreneurs that look to raise capital and eventually go public. The decision has also created a precedent and stigma that could loom over the cannabis industry.
The decision to block MassRoots’ listing was the sole result of an image and relations issue with the legalization of cannabis, as the company had met all of Nasdaq’s listing criteria, as reiterated by MassRoots’ co-founder Isaac Dietrich. Presently, the company boasts a market cap of over $40 million with over 300 sovereign shareholders.
While MassRoots has been stonewalled by its listings ambitions, the cannabis industry in the United States has definitely grown by leaps and bounds. For example, Amercanex, the American Cannabis Exchange, has had marked success partnering with tech providers and other cash management groups in recent months, despite carrying the same label and stigma as MassRoots. It is probable that the recent decision by Nasdaq had more to do with a overt reluctance towards embracing an illegal substance, as opposed to a fledgling product. Many eyes will be on future listings efforts as cannabis sees its legality grow across the US.