Flora Growth Launches $401 Million Treasury Initiative for Zero Gravity
Flora Growth, a cannabis company listed on Nasdaq, has unveiled a $401 million treasury initiative aimed at supporting Zero Gravity (0G), a blockchain project dedicated to advancing decentralized AI infrastructure.
Details of the Treasury Initiative
This strategic move is made possible through a private placement agreement that includes $35 million in cash and $366 million in digital assets, primarily in the form of 0G tokens. In light of this transaction, Flora will undergo a rebranding to ZeroStack while keeping its Nasdaq ticker symbol, FLGC, as stated in an announcement released on Friday.
- The deal was spearheaded by Solana (SOL) treasury company DeFi Development Corp. (DFDV), in collaboration with Hexstone Capital and Carlsberg SE Asia PTE Ltd.
- Other participants in this significant transaction include Dao5, Abstract Ventures, and Dispersion Capital.
Joseph Onorati, CEO of DFDV, expressed enthusiasm about partnering with FLGC in this fundraising effort, emphasizing the anticipation of fostering a strong collaboration between 0G and Solana. Additionally, Flora is set to retain a portion of its treasury in SOL tokens.
Investment Goals and Expectations
The purpose of this investment is to enhance 0G’s AI infrastructure, which is capable of training a model with 107 billion parameters using distributed clusters — a remarkable achievement that surpasses the benchmarks set by leading tech companies, including Google. 0G claims to offer a 357x efficiency upgrade over current distributed AI frameworks.
Incoming CEO Daniel Reis-Faria described the treasury initiative as an opportunity for institutional investors to gain equity-based exposure to a “transparent, verifiable, and privacy-first AI infrastructure.” The closing of this initiative is projected for September 26, subject to shareholder approval, with specific investors receiving pre-funded warrants related to the use of 0G tokens in the deal.
Market Analysis and Future Outlook
According to a report from Standard Chartered on Monday, digital asset treasury (DAT) firms are under increasing pressure as market net asset values (mNAVs) across the industry have seen significant declines. The early successes of Strategy’s Bitcoin accumulation model fueled a DAT boom, but now the landscape has changed, leaving smaller firms vulnerable as valuations plummet.
Typically, an mNAV above 1 allows companies to issue new shares and expand their crypto holdings. However, as many DATs are now trading below this benchmark, their access to affordable capital has diminished, hindering further growth and accumulation.
The bank predicts a wave of consolidation within the sector, with larger and better-capitalized entities like Strategy and Bitmine expected to emerge as likely winners. Conversely, smaller firms struggling with diminished mNAVs could become targets for acquisition.
