Flora Growth, a cannabis company listed on Nasdaq, has announced a significant $401 million treasury initiative aimed at supporting its new blockchain project, Zero Gravity (0G), which focuses on decentralizing artificial intelligence infrastructure. This strategic move is structured through a private placement deal that combines $35 million in cash with an impressive $366 million in digital assets, predominantly composed of 0G tokens.
In a recent statement, Flora Growth revealed its plans to rebrand as ZeroStack, while maintaining its existing Nasdaq ticker symbol, FLGC. This transformation underscores the company’s commitment to expanding its foothold in the burgeoning blockchain sector.
The financing initiative has garnered support from key industry players, including Solana treasury management company DeFi Development Corp. (DFDV), which spearheaded the funding round, along with collaborations from Hexstone Capital and Carlsberg SE Asia PTE Ltd. The financing also saw participation from firms such as Dao5, Abstract Ventures, and Dispersion Capital, enhancing its legitimacy and potential impact on the market.
DFDV CEO Joseph Onorati expressed enthusiasm about the partnership, stating, “We’re thrilled to partner with FLGC on this fundraise and look forward to driving a deep collaboration between 0G and Solana.” As part of the investment, Flora Growth intends to allocate a segment of its treasury to hold SOL tokens, further diversifying its digital asset portfolio.
A noteworthy aspect of the Zero Gravity project is its advanced AI capabilities. The initiative boasts the ability to train a 107 billion parameter AI model leveraging distributed clusters—a significant leap beyond achievements previously realized by major tech firms, such as Google. 0G positions itself as a leader in efficiency, claiming to offer a remarkable 357x improvement over existing distributed AI frameworks.
Incoming CEO Daniel Reis-Faria emphasized the significance of the treasury move for institutional investors, highlighting that it provides an opportunity for equity-based exposure to a “transparent, verifiable, and privacy-first AI infrastructure.” This strategic direction aims not only to attract investors but also to enhance the overall functionality and reach of the platform.
The closing of this fundraising initiative is anticipated to take place by September 26, contingent upon shareholder approval. Certain participating investors will receive pre-funded warrants, granting them access to 0G tokens linked to the offering, which should facilitate smoother integration into the 0G ecosystem.
On a related note, the digital asset treasury sector faces challenges as market net asset values (mNAVs) have experienced significant declines. A report from Standard Chartered indicates that many digital asset treasury firms are now wrestling with squeezed valuations, which complicates their funding strategies. A vibrant mNAV typically enables such firms to issue shares and expand their crypto holdings, but with many now trading below this benchmark, access to affordable capital has dwindled.
The bank projects that the landscape may undergo a phase of consolidation, with more prominent, well-capitalized entities expected to prevail over smaller competitors that are grappling with low mNAVs. These smaller firms may inevitably become acquisition targets as market dynamics shift.
This monumental move by Flora Growth not only illustrates the company’s ambition to embrace blockchain technology but also reflects broader trends within the digital asset space as businesses adapt to changing economic conditions.
