Safe Harbor Financial Enters SPAC Territory with a Proven Fintech Model Primed for Expansion

If there is a better name for Safe Harbor Financial than, well, Safe Harbor Financial, I cannot think of it. What this rare Denver, Colorado-based Credit Union Service Organization (CUSO) does and has been doing since 2015 is precisely and literally provide a commercial safe harbor to banking-strapped cannabis businesses. If these were sailors instead of cannabis operators, Safe Harbor would have saved thousands of lives by now, a feat it may have accomplished anyhow.

Over the years, Safe Harbor has expanded its customer base to include upwards of 600 accounts for businesses spread around 20 states and counting. Earlier this month, however, the company took its biggest leap yet, aside from its founding, with the announcement that it will be acquired from a subsidiary of Partner Colorado Credit Union (PCCU), a Colorado-chartered credit union based in Arvada, Colorado, by Northern Lights Acquisition Corp. (NASDAQ: NLIT), a special purpose acquisition company (SPAC) sponsored

by Luminous Capital and formed last year in Delaware by co-CEOs John Darwin and Joshua Mann with the goal of raising $100 million in its IPO. Upon the closing of the transaction, anticipated mid-2022, the combined entity will be led by Safe Harbor founder and CEO Sundie Seefried. With the ink barely dry, Seefried and Mann spoke last week with CBE about what the deal means for a still underserved industry, and why Safe Harbor believes it is best positioned among all its competitors to meet the ongoing demands of cannabis banking and capital financing, which Safe Harbor fully intends to expand upon.

For Seefried, who served as CEO of PCCU for over 25 years, this day has been a long time coming, even if she never anticipated it taking place. “I never foresaw this national expansion, the SPAC,” she said. “I never saw writing a book for the industry. [Navigating Safe Harbor: Cannabis Banking in a Time of Uncertainty (2016)], I never saw having to speak on stage 100 times. I was so focused on doing it right and making sure we could stay in business that I only saw getting it correct as far as the regulators were concerned, and then everything just started flowing so fast, it just came at me, and it grew.”

“Doing it right” meant meeting the needs of an often desperate banking constituency Seefried did not know existed before they started coming through her door. “We got approval in 2014 and launched January 1 of 2015,” she said of the founding of Safe Harbor. “The most interesting thing that I learned in January of 2015 was that I didn’t know what I didn’t know, and I didn’t know a lot. We started doing interviews, and they started coming in, and because we were a small credit union, we thought we were going to get mom-and-pops walking through that door and it would be a simple process.     Well, the first client came in, and they had two cultivation [sites] and three retail shops. The second one came in, and they had 10 retail shops and two cultivations, and a manufacturer. Third one comes in, and they have 17 locations, and I’m sitting at home, and it’s three weeks into January, and I’m saying, what did I get myself into. I spent 26 hours at my computer trying to make a system fit what I wasn’t expecting. But here’s the good news: the system was built for vertically integrated, multiple operations. So, that was my biggest surprise; that, and the sophistication of the owners, which really made us want to succeed in providing banking to them.”

In almost every way, Safe Harbor’s early days provided Seefried with not only a front row view of the challenges faced by the industry, but the opportunity to address them. “We launched with ten test clients and have since built it to nearly 600. We’ve processed over $11 billion in cannabis-related funds in the last seven years, and that’s important because what we’re doing is putting those funds into the financial system, and that was the biggest concern from regulators and FinCEN, that illicit dollars would find their way into the system. I will hold though that illicit funds were finding their way into the system much more prior to banking being available. So, banking has really assisted the industry in sorting out the good players from the bad players, and I always like to say, the more banking that’s available, the question law enforcement has to ask in order to find some of the illicit activities is, why don’t you have a bank account?

“Eventually, banking will be the eliminator of a lot of bad actors and help law enforcement, but that was not the way it was in 2015,” she continued. “A lot of the agencies didn’t want anybody facilitating [cannabis-derived] funds into the financial system at that point in time, but they wanted the accountability. The DEA [agent] said right to me, you shouldn’t be banking cannabis because it will lead to cocaine and heroin, and I’m like, I don’t think so. But he also admitted to me at that same time that he was now able to follow the money across the country, and that was super helpful to him. So, they were very conflicted, but they still wanted to do accountability, because with FinCEN, all they do is try to find these illicit players. We file probably 1000 reports a month and they use those reports to find illicit activity, so while banking was not appreciated at first, everybody wants accountability. I was getting used to mixed messages, and I said, we’re just going to have to do the right thing, which was the banking, and so we did.

“That was then,” she added. “Now, to put it in perspective, Safe Harbor in the last seven years – we’re starting our eighth year – has gone through 16 state and federal exams. Normally, in a seven-year period you would have a maximum of seven exams, but because we were cannabis heavy and because we were forging forward, the regulators have spent time in our shop in order to get familiar with cannabis. They would bring 20 or 23 Bank Secrecy specialists from across the country into our shop to learn cannabis, and that was really difficult on us, but at the same time all it served to do was improve our foundation and fine-tune our processes, and we ended up being the financial institution debating with them how to interpret the FinCEN guidelines. So, it was kind of interesting being at the front, but not fun.”

In fact, the services Safe Harbor provides to financial institutions essential if ephemeral. “What we provide to the financial institutions is a license to use all of our processes, procedures, IP, and our proprietary software that we built inhouse to manage the cannabis program,” said Seefried. “We put several [institutions] on the program and walk them through it, and then they learn it and once they learn it, they really get it. But it’s so much to learn up front that we find it takes six months to really get a banker trained at another financial institution and even here, because you can’t take it in all at once, there are too many complexities in bank secrecy and banking cannabis. So, what we’ve done is help other financial institutions put up their own programs.”

I asked Seefried if that practice will continue after Safe Harbor goes public. “We actually had a conversation about this yesterday while we were doing some strategic planning and trying to determine how to select the most important lines of business going forward and how we were going to do this,” she said. “I think what you will see – and what we’re going to bring to our board of directors to make sure they’re aligned with the direction we’re recommending – is that we’re going to be very selective with the states in which we will allow a financial institution to stand up a program, but we will still work with financial institutions on that level because it might be a market we don’t want to chase.

“To give you an example, Alaska is very remote, as is Hawaii,” she added. “So, because those are very remote markets that make it difficult for us to serve, it’s better to have a local financial institution than for us to try to serve at such a distance or in a remote situation. Likewise with the size of the market, if it’s not going to be a large enough market even for two financial institutions to be in, it’s probably better for us to put somebody in there and help stand up a smaller institution, so that’s what we’re going to be doing going forward.”

Expanding via Fintech

Safe Harbor’s model would not have been possible 50 years ago, prior to the advent of fintech, which refers to the integration of technology into financial services offerings in order to improve efficiencies. “First of all, we are not actually present in 20 states,” said Seefried, when asked about Safe Harbor’s physical footprint in a state. “In the last year, we have taken on some 20 states, and we’ve set up a foundation that works across the country to allow us to take our funds directly from those states and serve our operators who have gone out of state, or who are multistate operators. That has worked for us, and it really worked during COVID, because everything we’ve done with our companies and the banking has been remote. They’ve always done remote banking because we got into this to solve the Colorado problem, but as soon as they got banked, they started getting licenses in other states, and we had to make the decision, do we bank them in other states, or did we need them unbanked?

“So, we actually followed them,” she added, “because the Bank Secrecy Act actually requires that we know the company and we know their money. So, that’s how we got into the other states, and consequently, we ended up building the system and the platform to be able to serve them in those states, and to take their money and get it to them inside of 24 hours through the federal system. And that foundation will allow us first and foremost to go after newly legalized markets where they don’t have banking services. That will be probably the very first thing [we do] since we’ve got a pretty good stronghold and we’ve got a good reputation out there. This month, we’re going to be in Oklahoma at a conference, and they have a great need for banking, so we will be marketing to them, talking to them, and onboarding clients from Oklahoma, and we’ve already set up the process to be able to serve them from Oklahoma.”

“Consider Safe Harbor like a neo-bank,” added Mann. “Something that can be a decentralized platform for banking the cannabis industry across the country.”

I asked if tech was the foundation for the company’s scaling up. “Yes,” replied Seefried, “but we also have a robust merger and acquisition strategy because we want to create a one-stop-shop of financial services. Right now, you have a lot of single service providers out there in the market who have been bootstrapping it for years, and they’re really good at that single service. What we want to do is bring these services together under the Safe Harbor roof and be able to operate a one-stop-shop, so cannabis companies don’t need to go elsewhere, and they know that they have the reliability of the Safe Harbor reputation, that they’re not going to be shut out of these services., and they’ll be reliable.”

It was that reliability and a legacy of prudence that hooked the Northern Lights team on Safe Harbor, a company they had gotten to know as clients long before embarking on their new adventure as partners. “I’m the resident Canadian, and John, my partner, is an American,” said Mann of their early dabbling in cannabis. “I started out as an investor in the cannabis space back in 2014-2015, investing in some of the early-stage Canadian LPs and a bunch of the RTOs (reverse takeovers) that took the public on the Canadian exchanges. That was our first sort of touch point in the cannabis space, and then as the capital flows started moving to the border, and the fun started flowing down south, we saw the legalization efforts in Colorado occur, and in Washington and Oregon, and started financing smaller operators in the Colorado, Washington, and California regions. And, you know, it was early days, and some of the operators…we had to sort of take a more, I would say, activist positions and ended up jumping into operator roles.

“These were vertically integrated cultivators, retailers, extractors,” he added. “Between John and me, we’ve run the gamut of the operational sphere, but really, we came from traditional finance. He was buy-side, I was sell-side, but we got our hands literally dirty as we learned how to cut clones, build out cultivation facilities, and understand the top to bottom of the industry, bridging it with the finance component.

“So, that was our first run-in, and then when John and I started working together in 2018-2019, we both were clients through our respective businesses of Safe Harbor, and we saw the pitfalls,” he added. “We were each banking with some of the larger banks, and we were kicked out. You’re handed a check and you’re told, good luck. I remember having a check sent to me and it was a multi-million-dollar check. We had just raised money and I had to figure out where to put ii, and that was the genesis of how we originally learned about Safe Harbor because Partner Colorado Credit Union and the businesses we started banking with, and they were one of the only banks that would accept [cannabis]. We had confidence that we weren’t going to be shut out because it was compliant and it was challenging to get in, and it gave us the ability to actually grow our businesses. This is something you take for granted in every other industry, opening up a bank account.”

One-Stop-Shop

I asked Seefried exactly what specific services Safe Harbor will have to bring on in order to become that one-stop-shop. “So, you’ve got all your normal banking services, and we’re really going to hit 2022 with access to capital,” she replied. “That has been a new service that we tested out last year and have started offering, and so that’ll be the first product that we’ll bring to market at reasonable rates. The other types of services would be investment services and broker dealer services, where people often get kicked out of their accounts as well because they’re dealing too much cannabis stock; insurance products that are reliable and proven in the market; payment processing is a big one, because we do an awful lot of movement of money and we really learned to process payments and work with third party payment processors in the last year, so a lot of good experience there; payroll services, same thing. We’ve had a lot of exposure to this for the last seven years that has allowed us to say we can build this fintech model and pull the best of the best together in the market who may want to be part of that merger and acquisition strategy, or create it from within, but most of these would make more sense in an M&A strategy.”

As far as current demand for services and capital is concerned, the landscaper has changed, said Seefried. “It was much more in the early days than now because there are more banking options available out there now, but those that are popping up now lack one thing and that is experience. The point is that you can’t bank what you don’t understand, so experience and understanding the industry is crucial, and the industry likes to be understood. So, in order to really monitor and understand the industry, they’re going to have to build that foundation, and we have practiced for now eight years. So that’s the one thing, there are more options out there. But I just got another order this past week on another bank that is banking the industry, and the order tells them that they’re not doing the job well enough. So, I’ve seen three banks get in and get out in the last six months because they couldn’t fulfill their BSA obligations. So, there’s the risk. We bring in that reliability factor. Those trying to get in are perhaps cutting corners, trying to say that now that [cannabis banking has] been proven it can be done, but they don’t get the BSA obligation that goes with it to the extent that the regulators are satisfied.”

I asked her if she expects that dynamic to continue even after the SAFE Banking Act is passed

“I do,” she responded. “SAFE removes a couple of barriers, one being the fact that they cannot prosecute me as the CEO, as an officer, nor my board, simply for banking cannabis. That will be in SAFE and removes that risk from us all together, which is greatly appreciated, but I’ve always said that every year they allow us to do cannabis banking, the probability diminished in terms of coming in and prosecuting us because it’s almost been permission to allow us to do that, but the possibility is always there.

“So that’s the fear factor, and that’s why the conversation ends in the boardroom, because the board members in most financial institutions do not want to be put on the line personally and have that risk of prosecution,” she added. “The real risk is the Bank Secrecy Act, which is labor intensive. We’re now filing 1000 reports a month on the money we’re processing, which is approximately $300 million dollars a month in cannabis-related funds. Those reports have to be filed, and they aren’t cookie-cutter reports you can just pull out a system, because each client has to be pertinent law enforcement, so it’s very labor intensive. A lot of financial institutions won’t jump in, because a lot of financial institutions also don’t serve money service businesses for the same reason, and cannabis is more difficult than money service businesses. The cash-intensive nature [of the business] has a higher standard on BSA obligations.”

Will cannabis always be a high-risk business as far as banking? “I would say absolutely, for a couple reasons,” said Seefried. “First, it will remain cash intensive as long as there’s an older generation that has the stigma, ‘I don’t want this on my credit card, on my bank statement.’ You still have people buying alcohol in cash because they don’t want to be monitored, so it’s always going to be cash intensive, and that makes it a higher risk business. Alcohol stores are that way, casinos, all these are high risk businesses, because they’re taking in a lot of cash. The other reason is that they’re susceptible to illicit activities. You’ve got cannabis coming out of a black market and we’re trying to eliminate the illicit players. So, how long will that take? A long time. So yes, as far as I see, it will always be in that high-risk category.”

I remarked that likely bodes well for Safe Harbor in that it has this unique position with all of these financial institutions, helping to educate them despite the fact that they are competitors.

“Yes, but I did it for a reason,” said Seefried. “On a banking level, I have to manage risk every day, and if I’m the only one in the risk pool, they’re all looking at me. So, for the risk-mitigating strategy, I had to invite other financial institutions into it.”

SPAC Solid

In terms of the opportunity facing Safe Harbor, it has identified about 70,000 cannabis businesses nationwide, a rather big pool of potential clients. “I see it as a frontier of opportunity out there for us to jump into,” said Seefried. “We certainly didn’t strategically plan for 70,000, but it gives me great comfort to know that we can make the goals that we did put. Here’s why I think this is the perfect time for us to move into the SPAC environment and expand our business services, because while everybody else may be jumping in and providing just banking services, we’re trying to create that one stop with a lot of different services, and we hope that will attract the clients to us more than to other financial institutions.”

SPACs have not been getting terrible good press of late, I noted. Even the Wall Street Journal a month ago said the SPAC ship is sinking. Could that inhibit investor interest? “We completely see what you see, and when John and I decided to create Northern Lights, it wasn’t with wool over our eyes with respect to the overall market,” said Mann. “We saw this as an opportunity to find something special and unique, and I think part of the reason the luster has come off the SPAC market is because it’s lacking creativity in terms of the type of deals that sponsors are doing. And the other reason is, I think there are a lot of deals that are being overpaid for, and I think there is a massive disconnect with respect to market value and what SPAC sponsors are paying for their acquisitions. I think that another reason that luster has come off is there’s obviously a time limit with respect to stocks, and I think there were a lot of sponsors that got rushed and wanted to beat the time limit and paid whatever they had to, to get a deal done.

“We took a very different approach,” he added. “Right from the beginning, when we did our IPO, we said that we’re going to be in cannabis, that we’re going to focus on that, and that we’re going to focus specifically on the financing and financial services aspect of the industry, which we knew was underserved. So, instead of going after an ancillary business, a tech-stack business, or a touching-the-plant business, which would then have to be moved to a Canadian exchange, we saw a niche in the financial services. Now, it was serendipitous that we got connected with Sundie again. Safe Harbor had just decoupled out of a partner a few weeks after we listed, and we got connected, and it was just fortuitous timing.

“But we haven’t found the challenges that other people have found in the stock market, and I think that’s because of the unique nature of what Sandie has built,” he continued. “Cannabis is a growth industry and people know it, but more than that, we approached it from such a different angle, and what Sundie has built from a platform perspective in financial services, with such a clear lead in terms of the services that cannabis companies need on a daily basis. I think that in every industry it doesn’t matter if it’s up or down if you do something unique and that adds value, it will perform, and that’s how we view this. I think a testament to that is that in a very challenging market, we were able to raise a $60 million pipe beside the transaction.”

And as far as Safe Harbor is concerned, they are committed for the long term. “With respect to Safe Harbor, obviously we looked at a number of transactions before settling on them, but it was just so unique, and we took such a different approach to how most SPACs sort of happen, which is merely as a vehicle to go public for the entity,” explained Mann. “We took a partnership approach, and John Darwin, me, and Mac McDonald at Luminous, which is the sponsor of Northern Lights, we’re sticking around. We look at this as ‘let’s build something truly exceptional that’s going to help the industry.’ And with respect to jumping into the lending pool, while there are more lenders out there now, they’re going to have trouble competing with us due to our inherent cost of capital advantage relative to them, because we can effectively loan off of sticky balances like any traditional bank, so we have an ability to obtain the same absolute yield that they are on an internal basis while providing lower yields to the client. And it feels good to be able to actually help the industry, and to be a force that’s leading rate compression. Rates are still high in cannabis because of the inherent risk of the operators, but we are assisting a great deal in lowering the cost of capital and helping operators grow, because we know it’s been so challenging to access money over the past seven years in the U.S.”

As the company scales, will its cost for services come down? “Yes, we kind of had conversations about that, too,” said Seefried. “I would say that, as a banker coming from that thinking mode, that anytime you can get a full relationship means we’re going to drive the price down based upon relationships, and I would say that would be the first move we would make. I absolutely think that we’ll be able to drive pricing down especially on some of these other services that we bring in. We want to normalize the environment and still create enough profit to satisfy shareholders, but also keep our clients across the country.

“Let me give you a story,” she added. “Only about eight months ago, I had a couple of calls from private equity guys, and they said, ‘We want to give Safe Harbor a $60 million line of credit at six-and-a-half percent, and you can go loan it out any way you want.’ I said, ‘Well, that’s funny, because we were just getting ready to make our first loan at six-and-a-half percent, so I wouldn’t make very much on your money.’ And they kind of went silent because it was a game changer. That’s how the game is changing; now that you’re seeing financial institutions get into the market, you’re seeing the pricing on that capital go down. I’ve seen rates as high as 30 and 40 percent when I was onboarding these accounts, and it was not pretty for me. The hard money they were getting and the cost, the points on the back end; they were paying a lot, and you will start to see that normalized. But we will still see a premium on these loans because there’s still the fear of forfeiture and seizure, and the only thing that’s going to prevent seizure of property is making sure that you have a valid depository banking relationship with that client, that you trust them to the extent that they’re not doing anything illicit or out the back door, and all the money they’re putting into the institution is rock solid.”

Underscoring that dynamic is the fact that if a cannabis business goes upside down, it cannot file for bankruptcy protection. Is that correct, I asked Seefried. “From what I understand, that’s correct,” she said. Does that not make their services all the more valuable? “Yes, and that is why banking is expensive, because I don’t have to do this for normal business clients with the credit union. But for cannabis clients, we have to know them quarterly, we have to monitor them quarterly, and we have to know every dollar they’re putting in. It’s very labor intensive.”

A Frenzy of M&A?

Regarding Safe Harbor’s relationship with Partner Colorado Credit Union, I inquired if that continues on or becomes a thing of the past? “No, we have a very close relationship with Partner Colorado Credit union still, and we have I think it’s a three-year contract that is in place that we’ll be working out with them,” said Seefried, who added that as currently configured, Safe Harbor cannot conduct business without the relationship.

“At this point in time, in the fintech mode, we don’t want to be the money transmitter, which means we have to have a relationship with a financial institution to act as the money transmitter for us and carry that weight and responsibility,” she explained. “Because if we want to be a money transmitter, we have to have that license in every state mentioned earlier. Now, this is phase one, and that’s why we have the contract with Partner Colorado Credit Union, to get us to phase two, which is when we start considering a couple of different options, one being a full fintech charter that allows us to act as our own money transmitter. There are other options that we have on the table that we’re considering, but that’s just one.”

From the perspective of Luminous/Northern Lights, are they considering adding entities to the portfolio to complement the Safe Harbor acquisition? “The way we view this is, we call it a ‘one and done’ in terms of Safe Harbor,” said Mann. “Now, within Safe Harbor, we would love to see that grow, and we’re going to assist in that, and that’s sort of what Sandie alluded to earlier with the M&A strategy, but you’ll never see us back a competing firm to Safe Harbor. John and I will be on the board of the entity once everything gets listed, and we want to see this thing succeed. Where the real partnership aspect comes is we’re adding a tremendous amount of loan origination as we touch a lot of different parts of the cannabis industry – operators up and down the supply chain across all the legal states, and we’re looking to assist Sundie in her goal of building that one-stop-shop and a large enough moat so that when this industry does become legalized we have a far lead ahead of all of our competitors. I think what Sundie has built already is pretty exceptional. She did something when no one else would. She’s built probably the most compliant financial service firm for the industry. It’s something that can assist all the operators, and it’s something every operator needs, and that’s what got us so excited about this. It seems so simple because everybody takes it for granted. Anywhere else in the world, you want to open a bank account, you call your banker, you open a bank account, or you go online, and you’re approved in 10 minutes. It’s not the same in cannabis, and it’s a pain point. How do you create success in an industry? You find those pain points and you alleviate them, and that’s what Sundie built, and we’re going to assist her in building it even bigger.”

Will Safe Harbor one day expand beyond financial services and loans? “We always have to adapt with the market,” said Seefried. “One of the things we’re seeing right now is that some of our cannabis clients are starting to use stable coin or virtual coin, that type of thing, and so we’re getting ready to adapt to that and we’re studying it very carefully, how we can safely enter that and be able to serve our clients. One of the things we’ve done for the last seven years is always push our envelope along with this emerging market so that they had the services they need.”

Will Safe Harbor own its own retail some day, or its own brands? “I don’t know about financial services actually mixing with cannabis,” she responded.  “That’s an interesting concept, but one of the things we’re doing is we have to put the board together and make sure we’re all going in the same direction. So, we’re planning a strategic session to start actually getting board members to mesh together, and I guess we will find out how innovative the board wants to be.”

Mann added, “I would generally say, the best way to achieve success in something like this is to say hyper-focused on the near-term goals, and then really look outward. I think there’s so much growth ahead of us just within the financial services platform for the cannabis space, and maybe some other highly regulated industries, that we have a lot to chew off first. And I think Sundie is more than up for the task with respect to first becoming that dominant force within the financial services industry for cannabis. I think there’s a lot of road ahead of us, and we built probably the best platform to do it.”

According to Mann, from SPAC announcement to close is generally three to four months. I asked if we could expect to see a bevy of announcements in the third quarter and fourth quarters of 2022. Do they anticipate rocketing out of the gate?

“I can say we’re not starting flat-footed, and I would expect us to continue the growth trajectory from here on,” said Mann. “It’s not like we will start that hyper growth phase the day this transaction closes. I would say, and Sundie, please correct me if I’m wrong, but you’re already starting that that growth today.”

“Yes, we will make sure the foundation is there and obviously a plan to build the other services,” she said. “But what I will say here is that we are in our eighth year in the business, and we have created such valid relationships with some of these single service providers that we know when the time comes that they are interested, and we’ve worked closely and it’s a good cultural fit, so I believe we have a good strategy to bring the best of the best to the table.

“I’ll give you an example,” she added. “Right now, in order to get their money to the bank anywhere in the country, and all financial institutions really work this way, they actually have to engage a courier to pick up the cash in the dispensaries. That courier takes and counts the money, charges a contract to that client, and then gets the money to the bank or to the Federal Reserve, and then we credit their account. If we were to bring on our own cash courier, we could do relationship pricing. They wouldn’t be paying a courier and the bank, which means we can be reducing the price and they only have one contract to deal with, simplifying their life. The other thing I would say is when we talk about merger and acquisition strategy and we look at some of these partners, we have nearly 600 accounts here and maybe in their service they are providing another 200 or 300 or 400 accounts that don’t even overlap ours. A combination like that will make a lot of sense, because we’ll have access to their clients and they to ours.”

I asked about Safe Harbor’s revenue going forward, and whether it will be derived mostly from financial services, lending, or other streams? “I think where we see a lot of the near-term growth with respect to revenue generation is on the lending side,” responded Mann. “Traditionally and historically, Safe Harbor has been primarily deposit-driven revenue. One thing that’s very impressive, especially having been in the cannabis industry for quite a while now, is that it has been profitable since day one, and it looks like it’s going to continue to be. But really, a lot of the revenue generation, call it, in the next two years, is going to be from us deploying funds into other operators and really funding that capex growth of the industry. So, what we see near term is you’ll see that really come on, but then as we start building that full-service platform for financial services, you’ll see that diversify over time. But there’s just so much with respect to the lending side of things, and we have a very large actionable pipeline that we’re looking to deploy on. I think what’s really exciting is assisting the industry in growing when it has had such a hard time due to things like the 280E taxes. It’s hard for these operators to get the necessary cash flow to fund their own growth, and what we’re going to do is supply that capital to allow them to grow.”

What sorts of cannabis businesses will Safe Harbor be looking at to provide loans, and what types of deals will they be considering? “In terms of the types of businesses, primarily plant-touching businesses will be the ones that are looking for money,” said Mann. “Those are the ones that are subject to the wonderful 280E, and the MSOs, single-state operators, smaller mom-and-pop operators, they are all going to be what we look at. In terms of the types of deals, they are traditionally asset-backed, so a lot of times real estate as a collateral, but we also can be creative in terms of how to build that coverage for the loan. So, real estate equipment, and then sort of go down the list on that. I would say we are flexible in terms of our ability to create a coverage platform, but stringent in making sure that we have sufficient coverage for the loan. That’s how we’re looking at it, and again, we’re looking at being a friendlier face in this industry. As Sundie alluded to earlier, there are a lot of hard money lenders. We’re not that. We’re looking at building long-term relationships with our clients and giving them the service and the access to capital that they so greatly need.”

Out of time, I asked Seefried where she sees her baby in five or 10 years. “First of all, it’s more like an unruly teenager,” she said. “Getting out there in the market is really close to my heart, as you can probably tell, especially when I start talking about some of the old days when I remember what we went through. I envision Safe Harbor as a very successful fintech model working with more than one financial institution and creating the best of the best. We want the people who want to walk in the door and be the most compliant, and maybe it’s a little more work with Safe Harbor, but they get the reliability and the reputation. And yes, they know that we’ve been practicing this and built a foundation, so we’re going to be able to expand their services and drive pricing down for them ultimately. I think more of the same with a lot more services and the same reliable, friendly, personal service that they’ve always gotten.”

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