MassRoots Inc (OTCMKTS:MSRT) could become the first ever over-the-counter cannabis stock to be listed on the NASDAQ if a request for the same is approved. Dubbed as the ‘Facebook’ for cannabis consumers, the company has filed its IPO papers with NASDAQ. A decision on the same is expected in the next six weeks.
MassRoots Business Model
Formed in 2013, MassRoots provides a platform where pot smokers can interact with each other. The social network currently boasts of 775,000 users. The app allows users to share their marijuana smoking experiences as well as follow their favorite dispensaries. Marijuana businesses are also using the app to advertise their products.
The company according to the SEC filing plans to use proceeds from the filling to expand its business services. It also plans to use part of the funds as working capital as well as for developing new mobile app among other uses.
If accepted in the NASDAQ Capital market, MassRootsInc (OTCMKTS: MSRT) intends to list its common stock under the symbol MSRT. Co-Founder and Chief Technology Officer, Stewart Fortier, says they intend to use the filling to grow beyond the current investor base and working capital.
Possible Filling Headwinds
MassRoots filling could be dealt a major blow on the filling, on the fact that its business model revolves around a federally prohibited drug. Even though the company does not handle the plant directly, the NASDAQ could turn down its application on the basis that it deals with marijuana companies for advertising.
Filling on the NASDAQ is also dependent on the company’s ability to raise additional funding needed to meet requirements on the exchange. The company posted $213,963 in revenues last year leading to a net loss of $8 Million, which continues to evoke cash flow concerns. MassRoots will also have to reconstitute its board of directors to meet the capital market requirements.
A successful o MassRoots Inc (OTCMKTS:MSRT) on the NASDAQ could get the ground running on other cannabis-related companies pushing for listing.