A social network that’s kind of like Instagram but for stoners is trying to make the leap from the over-the-counter market to the Nasdaq.
MassRoots (^MSRT), which launched in 2013 and went public on the over-the-counter market in April of this year, has filed an application to have its shares listed on the Nasdaq. The company bills itself as one of the "largest and most active communities of cannabis consumers," a place where people can find smoking buddies, share experiences and connect with local dispensaries.
MassRoots has 500,000 members, a number it had predicted it wouldn't hit until the end of the quarter.
MassRoots hopes a move to the Nasdaq will help it garner more interest from institutional investors and help bring legitimacy to a burgeoning legal American marijuana industry that’s still operating in the shadows even as public sentiment toward the drug is changing.
But MassRoots still has to win the Nasdaq's approval, a process that can take weeks and requires the company's share price to rise above $3, among other requirements. MassRoots shares were trading at around $1.38 a share on Wednesday. The company has a market cap of around $60 million.
“We have a plan in place to meet all those requirements in the near future,” said MassRoots co-founder and CEO Isaac Dietrich.
But even meeting those requirements may not be enough.
“It is important to note that even though a company’s securities meet all enumerated criteria for initial inclusion, Nasdaq may deny initial listing, or apply additional conditions, if necessary to protect investors and the public interest,” the exchange, which doesn't comment on listing applications, says in its listing documents.
MassRoots recently began charging businesses to advertise on its network and soon begins to plan charging for consumer insights related to its users. “We are able to tell dispensaries what products, strains and services are most popular among cannabis consumers,” Dietrich said.
About 1,000 businesses already have profiles on the site, and about 50 of them have already signed advertising deals with MassRoots, Dietrich said, noting the site has generated about $25,000 in revenue since advertising sales began about two weeks ago.
Because Facebook and Twitter don't allow advertising by cannabis dispensaries and related businesses, MassRoots offers one of the few ways for marketers to reach cannabis consumers through social media.