Flora Growth, a publicly traded cannabis company on the Nasdaq exchange, is committing $401 million to a treasury initiative. This investment will support Zero Gravity (0G), a cutting-edge blockchain project focused on developing the infrastructure for decentralized artificial intelligence.
This strategic move involves a private placement that includes $35 million in cash and $366 million worth of digital assets, primarily in the form of 0G tokens. The agreement includes a corporate rebranding; Flora will be known as ZeroStack, while preserving its existing Nasdaq ticker symbol, FLGC, according to a recent announcement.
DeFi Development Corp. (DFDV), a Solana (SOL) focused treasury management firm, spearheaded the deal, alongside Hexstone Capital and Carlsberg SE Asia PTE Ltd. Other participating firms included Dao5, Abstract Ventures, and Dispersion Capital.
“We are excited to partner with FLGC on this financing and anticipate strong synergy between 0g and the Solana ecosystem,” stated Joseph Onorati, CEO of DFDV. As part of its treasury strategy, Flora will also hold a portion of its assets in SOL tokens.
Related: Crypto treasuries with long-term strategy will ‘survive any market’: Hashkey
Zero Gravity Achieves Milestone: Trains 107B-Parameter AI Model
The funding is designed to accelerate the development of 0G’s AI infrastructure. This infrastructure has already demonstrated the ability to train a 107 billion parameter model using distributed clusters, exceeding previous benchmarks set by major technology companies like Google. 0G reports a significant 357x improvement in efficiency compared to existing distributed AI frameworks.
Daniel Reis-Faria, the incoming CEO, characterized the treasury allocation as a gateway for institutional investors to gain equity exposure to an AI infrastructure that is “transparent, verifiable, and privacy-focused.”
The deal is anticipated to close by September 26th, subject to shareholder approval. Select investors will receive pre-funded warrants linked to the usage of 0G tokens within the offering.
Related: Bitcoin as corporate treasury: Why Meta, Amazon and Microsoft all said no
Standard Chartered Issues Warning About Digital Asset Treasury Sector Shakeout
According to a recent report by Standard Chartered, digital asset treasury (DAT) firms are facing increasing difficulties due to a substantial decline in market net asset values (mNAVs) across the industry. The DAT boom, initially fueled by the success of Strategy’s Bitcoin accumulation approach, has slowed down, exposing smaller companies to greater risks as their valuations decrease.
Typically, an mNAV above 1 allows firms to issue new shares and expand their cryptocurrency holdings. However, with many DATs now trading below this level, access to inexpensive capital has diminished, hindering further accumulation and growth.
The bank anticipates industry-wide consolidation, with larger, better-capitalized players, such as Strategy and Bitmine, likely emerging as winners. Smaller firms grappling with reduced mNAVs may become acquisition targets.
Magazine: Meet the Ethereum and Polkadot co-founder who wasn’t in Time Magazine