A cannabis social media company says its application to list on the NASDAQ stock exchange was denied because staff reportedly determined that the online portal for marijuana enthusiasts may be deemed as aiding and abetting the distribution of an illegal substance.

“Gaining access to the NASDAQ and other major exchanges is important for the continued growth of the legal cannabis industry,” said Mark Zittman, chairman of Tuatara Capital, a private equity firm in New York.

Although recreational use of marijuana is illegal federally, MassRoots plans to appeal the decision to the NASDAQ Listing and Hearings Review Panel.

“This denial has ripple effects across the entire industry, making it more difficult for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States,” said Isaac Dietrich, CEO of MassRoots in Denver.

Legalization is currently a mixed bag with 24 states having some form of legal marijuana.

“Restricting the ability for companies like MassRoots to raise capital in the public equity markets will force them to rely on private funds to finance their growth agendas,” Zittman told Newsmax Finance. “It’s challenging to scale effectively without efficient access to capital.”

MassRoots currently trades as a penny stock under the ticker MSRT.

“This moment is about legitimacy and now that cannabis is legal in some form in half of the United States, it's time that those who run the market stop kowtowing to outdated social views and started recognizing the next great American industry," said Michael Bronstein, lead consultant with the American Trade Association for Cannabis & Hemp in Washington D.C.

Phone calls to NASDAQ were unreturned by press time.

Juliette Fairley is an author, lecturer and TV host based in New York. To read more of her work, Click Here Now.