Colorado-based marijuana finance firm SHF Holdings, better known as Safe Harbor Financial, has struck a new debt deal with Partner Colorado Credit Union. The move, which includes a temporary shift to interest-only payments, is expected to free up more than $6 million in cash—money that would have otherwise gone toward loan principal payments.
More Liquidity, More Opportunities
Safe Harbor’s modified loan terms come at a crucial time. The agreement allows the company to pay only interest for two months—February and March 2025—while keeping its current 4.25% interest rate for the remainder of the loan term.
For Safe Harbor, this means one thing: more cash on hand. And in a capital-intensive industry like cannabis, where traditional banking services are limited, liquidity is everything. CEO Terry Mendez, who recently stepped in after Sundie Seefried’s retirement, sees this as a strategic win.
“The note modification significantly enhances our financial standing,” Mendez said. “It also provides Safe Harbor with tremendous optionality as we enter this new chapter.”
Flexibility in a Tight Market
With $6 million freed up, Safe Harbor is positioning itself to expand its service offerings. What exactly that will look like remains unclear, but the company has hinted at broadening its financial services for the cannabis sector.
The industry has faced continued financial hurdles due to federal banking restrictions. Many banks avoid cannabis businesses altogether, forcing companies like Safe Harbor to step in and provide specialized financial services.
“This new agreement provides us with flexibility to pursue additional opportunities,” Mendez added, reinforcing the firm’s focus on long-term growth.
A Major Shareholder’s Confidence
Partner Colorado Credit Union, one of Safe Harbor’s largest shareholders, also backs the move. CEO Doug Fagan pointed to the long-term benefits of keeping Safe Harbor financially nimble.
“We realize that Safe Harbor’s success contributes to the success of our members,” Fagan said. “This debt modification will provide the financial flexibility necessary to pursue new opportunities.”
That’s a telling statement. It suggests that Safe Harbor could be eyeing new lending programs, acquisitions, or expanded partnerships—moves that could solidify its role as a go-to financial institution for cannabis businesses.
What This Means for the Industry
The cannabis industry has long struggled with banking access. Federal restrictions mean major banks remain hesitant to serve cannabis businesses, leaving firms like Safe Harbor to fill the gap.
This deal signals that Safe Harbor is making strategic moves to ensure it remains a key player in this space. More cash on hand gives the company the ability to adapt, invest, and possibly take on more clients.
Here’s why this matters:
- More financial flexibility – With extra liquidity, Safe Harbor can expand its lending and financial services.
- A potential competitive edge – The company’s ability to pivot could set it apart in an industry still struggling with banking challenges.
- Stakeholder confidence – The support from Partner Colorado Credit Union suggests that major investors believe in Safe Harbor’s long-term strategy.
Looking Ahead
The cannabis industry remains in flux, with regulatory uncertainty still a major factor. But for Safe Harbor, the ability to modify debt terms and secure extra cash flow could be a game-changer.
While the company has not laid out specific plans for how it will use the additional funds, one thing is clear: having more cash to work with puts it in a stronger position to navigate an unpredictable market.