MassRoots/MSRT Files To Be NASDAQ's First Cannabis Stock
Debra Borchardt , CONTRIBUTOR
I write about the business of marijuana.
FOLLOW ON FORBES (76)
Opinions expressed by Forbes Contributors are their own.
MassRoots, Inc., the ‘Facebook'; FB -1.10% for cannabis consumers, is filing an offering to go public with hopes that the NASDAQ will approve them for a listing.
The social network was formed in April of 2013 as an online community for people that smoke pot. It now has 775,000 users and 380,000 followers on Instagram. While there are plenty of social networks like Facebook, Twitter TWTR +1.20% or Instagram, many people are not comfortable sharing their cannabis consumption in a place that family, friends and co-workers go to.
MassRoots has applied to the NASDAQ Capital Market to list its common stock under the symbol “MSRT.” NASDAQ won’t comment on the company as it is under review. While MassRoots doesn’t “touch the plant,” just the association could cause NASDAQ to turn it down. MassRoots makes it clear in its filing the marijuana is still a schedule 1 drug and as such is illegal under federal law. Since MassRoots works with cannabis companies for advertising, they could be see as “aiding and abetting” an illegal activity.
MassRoots plans to use the proceeds of the offering for general working purposes, but also to repay bridge notes and develop new feature sets for the mobile applications. The company will also need the additional money in order to meet NASDAQ requirements, which they expect will cost the company $150,000 a year – should NASDAQ approve them. MassRoots has also made sure that its board of directors meets the NASDAQ requirements.
Currently the stock trades on the OTCQB Marketplace under the symbol MSRT and hit a high of $7.01 , but is lately trading at $1.28. As of March, there were 90 shareholders of record and roughly 47 million shares issued and outstanding.
The network did say it has a bank account for now, but that can change without notice. An unrelated website had its account with Chase closed and even though it too did not “touch the plant”, it offered a coupon to a dispensary and that was too much for Chase. For now though, Mass Roots has an account.
MassRoots has revenue of $213,963 for the year ending 2015, but logged a net loss of approximately $8 million.MassRoots had $386,316 in cash on hand as of the end of 2015. It only began selling advertising in August of 2015 and while advertising revenue can hard to predict, Facebook has shown that it can be a successful strategy if done right.
MassRoots plan is to generate most its revenue from advertising. The network doesn’t capture personal identification from its users, but does track location and cannabis choices. Based on pictures and hash tags that are posted, they can determine what type of cannabis a user prefers, how they prefer to consumer it and what time of day they are most active.
MassRoots hopes businesses will be drawn to the targeted audiences. Google GOOGL +0.42%, Twitter and Facebook don’t allow advertising from dispensaries, which gives MassRoots little competition. If that changes, it could affect its revenue model.
The company had a slight setback at the end of 2014 when Apple AAPL +1.32% removed the MassRoots app from its store, but it was returned to the App Store in February 2015. However, MassRoots is clear that Apple could choose to remove it again. They haven’t had any problems with the Google Play Store.
MassRoots was a semi-finalist for the Extreme Tech Challenge and was one of the first cannabis related companies to present on stage at the Consumer Electronic Show in Las Vegas in January. It has raised much of its seed-stage capital from ArcView Group, a cannabis investor group.
Similar to Facebook, MassRoots for Business allows for companies to create a page. Currently this is a free service.
The company is based out of Denver Colorado and the chief executive officer is Isaac Dietrich, who was a finalist for Peter Thiel’s 20 Under 20 Fellowship. The board includes Tripp Keber, managing partner of Dixie Elixirs and Ean Seeb, co-owner of Denver Relief Consulting. The chief financial officer is Jesus Quintero, who served as Brazil Interactive Media’s CFO and has experience in public company reporting. Chardan Capital Markets is the underwriter.
NASDAQ isn’t expected to make it decision for another few weeks.
http://www.forbes.com/sites/debraborchardt/20...4a4afd4071
Debra Borchardt , CONTRIBUTOR
I write about the business of marijuana.
FOLLOW ON FORBES (76)
Opinions expressed by Forbes Contributors are their own.
MassRoots, Inc., the ‘Facebook'; FB -1.10% for cannabis consumers, is filing an offering to go public with hopes that the NASDAQ will approve them for a listing.
The social network was formed in April of 2013 as an online community for people that smoke pot. It now has 775,000 users and 380,000 followers on Instagram. While there are plenty of social networks like Facebook, Twitter TWTR +1.20% or Instagram, many people are not comfortable sharing their cannabis consumption in a place that family, friends and co-workers go to.
MassRoots has applied to the NASDAQ Capital Market to list its common stock under the symbol “MSRT.” NASDAQ won’t comment on the company as it is under review. While MassRoots doesn’t “touch the plant,” just the association could cause NASDAQ to turn it down. MassRoots makes it clear in its filing the marijuana is still a schedule 1 drug and as such is illegal under federal law. Since MassRoots works with cannabis companies for advertising, they could be see as “aiding and abetting” an illegal activity.
MassRoots plans to use the proceeds of the offering for general working purposes, but also to repay bridge notes and develop new feature sets for the mobile applications. The company will also need the additional money in order to meet NASDAQ requirements, which they expect will cost the company $150,000 a year – should NASDAQ approve them. MassRoots has also made sure that its board of directors meets the NASDAQ requirements.
Currently the stock trades on the OTCQB Marketplace under the symbol MSRT and hit a high of $7.01 , but is lately trading at $1.28. As of March, there were 90 shareholders of record and roughly 47 million shares issued and outstanding.
The network did say it has a bank account for now, but that can change without notice. An unrelated website had its account with Chase closed and even though it too did not “touch the plant”, it offered a coupon to a dispensary and that was too much for Chase. For now though, Mass Roots has an account.
MassRoots has revenue of $213,963 for the year ending 2015, but logged a net loss of approximately $8 million.MassRoots had $386,316 in cash on hand as of the end of 2015. It only began selling advertising in August of 2015 and while advertising revenue can hard to predict, Facebook has shown that it can be a successful strategy if done right.
MassRoots plan is to generate most its revenue from advertising. The network doesn’t capture personal identification from its users, but does track location and cannabis choices. Based on pictures and hash tags that are posted, they can determine what type of cannabis a user prefers, how they prefer to consumer it and what time of day they are most active.
MassRoots hopes businesses will be drawn to the targeted audiences. Google GOOGL +0.42%, Twitter and Facebook don’t allow advertising from dispensaries, which gives MassRoots little competition. If that changes, it could affect its revenue model.
The company had a slight setback at the end of 2014 when Apple AAPL +1.32% removed the MassRoots app from its store, but it was returned to the App Store in February 2015. However, MassRoots is clear that Apple could choose to remove it again. They haven’t had any problems with the Google Play Store.
MassRoots was a semi-finalist for the Extreme Tech Challenge and was one of the first cannabis related companies to present on stage at the Consumer Electronic Show in Las Vegas in January. It has raised much of its seed-stage capital from ArcView Group, a cannabis investor group.
Similar to Facebook, MassRoots for Business allows for companies to create a page. Currently this is a free service.
The company is based out of Denver Colorado and the chief executive officer is Isaac Dietrich, who was a finalist for Peter Thiel’s 20 Under 20 Fellowship. The board includes Tripp Keber, managing partner of Dixie Elixirs and Ean Seeb, co-owner of Denver Relief Consulting. The chief financial officer is Jesus Quintero, who served as Brazil Interactive Media’s CFO and has experience in public company reporting. Chardan Capital Markets is the underwriter.
NASDAQ isn’t expected to make it decision for another few weeks.
http://www.forbes.com/sites/debraborchardt/20...4a4afd4071
