Credit Union to Sell Colorado Marijuana Financial Branch for $185 Mill…
As CEO of one of Colorado’s first financial institutions to serve the marijuana industry, Safe shelter Financial, Sundie Seefried remembers when business owners paid million-dollar tax bills in cash.
“It was crazy,” she recalls. “That’s why we got into it, though, was those stories and the safety factors these business owners dealt with.”
Just over eight years later, Safe shelter has processed over $11 billion in transactions, and is about to join a company listed on the NASDAQ stock exchange.
Northern Lights Acquisition Corp., a New York firm, just announced that it will pay $185 million to acquire Safe shelter from parent company Partner Colorado Credit Union. The deal includes $70 million in cash and $115 million in Northern Lights stock, with Seefried set to retain her role after the transaction is closed.
Because of the plant’s federal prohibition, the majority of retail marijuana transactions are done in cash. The federal government has taken a hands-off approach to edges serving state-legal marijuana businesses trying to place the cash, but other financial actions have been largely limited to local and regional institutions, which are more willing to function under the risk of technically breaking federal drug laws.
established shortly after Colorado voters legalized as a hobby marijuana in 2012, Safe shelter Financial deliberately started slow in order to comply with state and federal guidelines, but has grown with the industry itself. Annual deposits started at $153 million in 2015, and increased to around $4 billion in 2021, according to the company.
Safe shelter chiefly handled deposits for the pot industry in its early years, but has since branched out to more financial sets, including commercial loans and processing business mergers. After Safe shelter becomes part of Northern Lights, Seefried expects that more sets for marijuana businesses will become obtainable.
“Once our clients in Colorado got their depository sets taken care of and weren’t dealing in cash all the time, they started getting licenses in other states,” she says. “We want to add investment sets, broker-dealer sets and the same kind of sets our clients are getting thrown out of edges for.”
Around sixty of Safe shelter’s clients are Colorado businesses, according to Seefried; once the deal is closed, Northern Lights plans to increase Safe shelter’s reach outside of Colorado.
“Safe shelter is one of the only multi-state financial service organizations to successfully navigate the highly regulated cannabis banking industry, providing sets that operators in other industries take for granted,” Northern Lights says in a statement announcing the deal, adding that Safe shelter “is uniquely positioned to extent.”
Navigating a market that is nevertheless federally illegal has never been easy, Seefried points out, but legal pot’s fast evolution and laws that differ from state to state made her line of work increasingly difficult as marijuana industry mergers and acquisitions increased. “Every time it changes, we have to change our risk-mitigating strategies, and that’s going to continue to be challenging as along as the market continues to merge.”
Colorado Congressman Ed Perlmutter’s SAFE Banking Act would protect edges and financial institutions that serve marijuana businesses from federal enforcement. The legislation has successfully passed the House a handful of times, but has however to receive a hearing in the Senate. Although Perlmutter isn’t seeking reelection in 2022, Seefried believes another House member will take up the torch, and she’s optimistic about SAFE Banking’s chances.
“I do believe it has a shot. There are so many priorities in Washington right now, so it’s hard to say,” she adds. “I am one of those hopeful people.”
If marijuana banking is ultimately allowed at the federal level, Seefried doesn’t worry about national edges taking over the business, though. She compares marijuana banking to financial sets for the liquor, gambling and gas stop industries, which all function with large amounts of cash.
“I always think the smaller community edges and credit unions will have and advantage in doing this,” Seefried says. “If you ask ten big edges if they do money-intensive sets, I’d say maybe two truly offer them.”
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