Late last month, NASDAQ-listed cannabis operator Flora Growth, which once operated one of Colombia’s largest outdoor cultivation facilities, became the latest to exit the cannabis industry, rebranding as an AI-focused digital asset firm ZeroStack Corp. 

As the global market continues to mature, consolidation and collapse are nothing new. The last few years of global political turmoil, risk-averse investment across financial markets and the continued decline of cannabis stock prices have made it a brutal sector to be in.

For some, that means consolidation, merging, acquiring, or being acquired in pursuit of the scale needed to survive in an increasingly competitive landscape. For others, they are left with the choice of quietly selling off their assets or pivoting their entire business into a new, more forgiving sector. 

Flora’s pivot out of the cannabis industry to the booming AI sector marks the latest, and by far the largest, to utilise this exit ramp. Whether any of the struggling cannabis companies now taking refuge in the AI sector can build a successful business remains to be seen, but the parallels between the emerging sector and the early cannabis investment rush are undeniable. 

Flora’s transformation 

By the time Flora announced its rebrand, its financial struggles were already embedded. In its latest published financial results, covering the nine months to September 30, 2025, Flora reported a net loss of $9.8m, alongside an accumulated deficit of $167.9m. 

Earlier in the year, multiple subsidiaries tied to a prior acquisition had entered insolvency proceedings in Canada and Germany, forcing deconsolidation and balance sheet adjustments.

Then, in late September, the break became formal. Flora transferred 100% of its legacy hemp and cannabis subsidiaries, including JustCBD, Vessel, United Beverage Distribution, TruHC Pharma and Rangers Pharmaceuticals, to a group of investors in exchange for the cancellation of approximately $2.2 million in promissory note obligations. 

The cannabis division was classified as discontinued operations, having generated a $4.3 million loss over the reporting period. 

This sale, the company said explicitly in its financial reporting, formed part of ‘several strategic changes to become a digital assets treasury company.’ 

Effectively, this meant that the entirety of the company’s legacy hemp and cannabis operations, including brands, inventory and infrastructure, was exchanged for the write-off of around $2.2m in debt. 

Its dramatic offloading of cannabis assets was mirrored by an even bolder move, announcing that it planned a $401m private investment in public equity transaction, comprising $366m in digital assets and $35 million in cash, with common shares priced at $25.19 and 0G tokens valued at $3.00 each

The 0G cryptocurrency, native to the ‘Zero Gravity’ decentralised AI infrastructure project, was Flora’s primary reserve asset, with participation led by crypto-focused investors including DeFi Development Corp.

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As of September 30, 2025, Flora reported ownership of 21.8m 0G tokens with a cost basis of approximately $54.7m and a fair value of approximately $55.3m. Total digital asset exposure stood at roughly $55.4m. 

While well below the headline $401m target, the transaction incorporated cash placements, pre-funded warrants issued in exchange for tokens, and convertible notes denominated in both Solana and 0G tokens, transforming Flora’s struggling balance sheet into a token-backed treasury vehicle.

This strategic about-turn also saw a changing of the guard. CEO Clifford Starke resigned as CEO in October 2025, with a formal separation agreement sealing his divorce soon after. 

Michael Heinrich, co-founder of 0G, was appointed Executive Chairman, and Daniel Reis-Faria became CEO. On December 19, shareholders approved the name change to ZeroStack Corp, a new class of preferred shares, an expansion of the incentive compensation plan, and the issuance of shares underlying warrants and convertible notes tied to the September placement. 

“The Company, which will be rebranded as ZeroStack, is a decentralised AI treasury company that is investing in the future of AI infrastructure through strategic ownership in 0G Tokens,” its announcement at the time read. 

Then, on January 28, 2026, Flora announced the withdrawal of a proposed public offering of common shares. No size was disclosed, and no reason was given. The announcement came just weeks after shareholder approval of substantial capital flexibility and the formal repositioning as ZeroStack, suggesting an attempt to access broader public capital markets that, for whatever reason, did not proceed.

History repeating 

Flora’s rapid pivot undoubtedly represents the largest former cannabis company to pursue the greener pastures of the AI sector, but it is far from the first. 

In January 2024, Business of Cannabis reported that London-listed CBD skincare company Cellular Goods had rebranded itself as ‘Cel AI’, declaring its intention to become the ‘premier AI recommendation agent for personalised skincare and beauty routines.’ 

The pivot came days after its CEO resigned, and followed annual results showing losses of £3.3m on revenue of just £67,236, around 40 times less than the company’s operating costs. 

Its cash had halved year-on-year to £1.7m. The incoming executive director had no cannabis experience but 20 years in tech. 

The very same week, we reported that cannabis investment company Pharma C, which had net assets of just £201,000 and had recently returned from an Aquis Exchange suspension for breaching market abuse regulations, had amended its investment policy to target ‘technology, fintech and AI sectors.’ 

Then in August 2025, AIM-listed SEED Innovations, which had largely focused its investment strategy on cannabis and biotech ventures, announced plans for a major strategic pivot toward AI. The shift followed what outgoing CEO Ed McDermott had described as a ‘difficult’ 2024, and came alongside growing involvement from former chairman Jim Mellon, who had built his stake to over 20%. 

Reverse green rush

In the early days of the global cannabis industry, the so-called ‘green rush’ that took place around 2018, it was the destination, rather than the off-ramp, for companies and entrepreneurs seeking to capitalise on the latest high-risk, high-reward industry. 

Mining companies, biotech shells, and blockchain firms rushed to rebrand around cannabis as legalisation momentum built and speculative capital flooded in. 

The parallels with today’s AI pivots are difficult to ignore. The same structural incentives are present, a sector drowning in hype and investment, but little in the way of watertight business plans or monetisation strategies. 

In a sector increasingly defined by operational performance, profitability, and hard-won licensing, the widespread migration is no surprise. 

But for those following hype, there are lessons to be learned from the long-collapsed cannabis boom. 

While the investment in AI from retail investors, institutional financial stallwarts and even national governments is eyewatering, the fact remains that even the largest AI operators are struggling to turn a profit, and seemingly have no fleshed out strategy to do so.