This week, MassRoots Inc. (MSRT) , one of the biggest and fastest expanding technology platforms for the marijuana industry, received notification that NASDAQ had denied the Company's application for listing. MassRoots, which launched in 2013, models itself as a Facebook for cannabis users. It also allows weed in its workplace. The Company filed for an up listing from the Over-the-Counter Bulletin Board to NASDAQ in August 2015 -- the NASDAQ approval process usually takes just four-to-six weeks. The Company was hoping to be the first cannabis company to list on NASDAQ.

Isaac Dietrich, co-founder of MassRoots, said, "With this decision, we believe that the NASDAQ has set a dangerous precedent that will prevent other legal marijuana companies from getting listed on national stock exchanges...This [will make] it more difficult for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States."

According to MassRoots, NASDAQ determined that listing the company could have been seen as aiding the distribution of an illegal substance, even though the company's business model does not involve touching the marijuana plant in any way. The company plans to appeal the decision to the NASDAQ Listing and Qualifications Board and is asking cannabis enthusiasts and investors to submit letters of support to the Board.

Unfortunately for the young company, the listing denial was probably warranted. The company is currently trading under a dollar with no path to profitability in sight. 

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NASDAQ's denial centered on these concerns primarily. MassRoots floats a $260,000 per month burn rate with no clear path to sustainable revenue. The Company does not hold any proprietary technology or software and has extremely high acquisition costs. With regards to the user cost for on-boarding and the revenue generated, "the juice isn't worth the squeeze," said Jason Spatafora on his website

Spatafora has long not been a fan of the company. In an article in May Spatafora went as far to say, "I would short MassRoots at $1.50 and now it's under $1."

"In the cannabis industry, we face setbacks every day that other industries don't face," Dietrich said. "But we move forward."

MassRoots has stated it will appeal the rejection to the Securities and Exchange Commission if necessary.

This article is commentary by an independent contributor. At the time of publication, the author held ZERO positions in the stocks mentioned.