A cannabis company’s effort to list on one of the largest stock exchanges in the world has been blunted.

MassRoots MSRT, +13.51% , a social networking app for marijuana consumers and businesses, said its application to list on the Nasdaq was rejected on Monday. The company initially applied to list on the exchange in August 2015, and filed a prospectus in April. The company is currently listed on the OTC Markets Group’s OTCQB marketplace, which typically lists firms in the developmental stage.

In its notice, the Nasdaq NDAQ, -1.59% said the company could be determined as “aiding and abetting the distribution of an illegal substance,” according to the MassRoots news release. The Nasdaq declined to comment on the rejection. MassRoots doesn't deal directly with the growing or sale of cannabis, rather serves as a platform for consumers and legal businesses to share industry news and information. The network has about 900,000 users, according to the release.

In its listing rules, the Nasdaq states that it upholds federal law. Marijuana is illegal on the federal level, however medical marijuana has been legalized in 23 states, and four states and the District of Columbia have legalized cannabis for recreational use.

MassRoots acknowledged this discrepancy in its S-1 filing, stating, “There is no guarantee that the [President Barack] Obama administration will not change its stated policy regarding the low-priority enforcement of federal laws in states where cannabis has been legalized…a new administration could introduce a less favorable policy or decide to enforce federal laws strongly.”

There are also major financial risks detailed in the filing, including a reported net loss of about $8.5 million in 2015 and ineffective internal financial reporting.

MassRoots will appeal the rejection, said the company’s chief executive Isaac Dietrich. “We’ve been through these things before,” Dietrich said, citing their removal from Apple’s AAPL, -3.17% app store in 2014, a decision that was ultimately overturned.

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Despite MassRoots’ rejection, there are other companies related to the cannabis industry that continue to be publicly traded. Terra Tech, TRTC, +2.15% a cannabis-focused agriculture company that also lists on the OTCQB marketplace, acquired a dispensary in January, marking the first time a company involved in seed-to-sale cannabis operations could be publicly traded.

“I believe the first company that uplists to an exchange needs to have significant revenue and a healthy balance sheet before we can expect acceptance,” said Derek Peterson, chief executive of Terra Tech, in an email. “We cannot forget that just a short time ago businesses like ours were being raided and shuttered on a weekly basis.”