Nasdaq officials have told MassRoots, a sort of “Facebook for pot,” that it can't join the exchange.

The Denver-based social network has 775,000 users from the 24 states where marijuana is legal medicinally (including those states where it's also legal recreationally), who use the platform to find like-minded people in their area, learn about nearby dispensaries, and follow pot legalization news. MassRoots has said it meets the criteria for listing on Nasdaq—it has a $40 million market capitalization value and “well over 300 shareholders” through over-the-counter markets, according to CNN Money.

MassRoots alleges that the decision to deny the social media platform a place on Nasdaq was due to the fact that marijuana use and cultivation remains a federal crime. “On May 23, 2016, Nasdaq denied MassRoots' application to list on its exchange for being cannabis-related,” the company wrote. “We believe this dangerous precedent could prevent nearly every company in the regulated cannabis industry from listing on a national exchange, making it more difficult for cannabis entrepreneurs to raise capital and slow the progression of cannabis legalization in the United States.”

Nasdaq, of course, reserves the right to deny companies listing on its exchange. According to MassRoots CEO Isaac Dietrich, a representative from the exchange called him to inform him that Nasdaq would deny Dietrich's bid for listing, adding that Dietrich could quietly withdraw MassRoots' application without Nasdaq's refusal being made public. The CEO decided against such an approach and wrote an e-mail to MassRoots members and other interested parties instead.

Listing on the stock exchange would have given MassRoots and opportunity to raise more funding, but Nasdaq's rebuff has sent the company's off-exchange shares tumbling 18 percent as of this afternoon. According to the Denver Post, Dietrich has asked for Nasdaq's denial in writing and intends to appeal the decision to Nasdaq and to the Securities and Exchange Commission (SEC) if necessary as well.