Safe Harbor Financial Issues Statement on Cannabis Rescheduling

Rhea-AI Summary

Safe Harbor Financial, a leading financial services provider to the regulated cannabis industry, issues a statement on the DEA rescheduling cannabis from Schedule I to Schedule III. CEO Sundie Seefried highlights the positive impact on lending opportunities, access to capital, and financial stability in the industry. This shift is expected to drive growth, innovation, and job creation. The global implications of rescheduling could influence international agreements and treaties. Despite the positive changes, challenges with payment networks and regulatory compliance persist. Safe Harbor Financial remains committed to providing tailored financial solutions to support the evolving cannabis sector.

Positive

• Rescheduling cannabis to Schedule III is a positive step towards recognizing its medical potential and legitimacy in the financial industry.

• Broader lending opportunities for cannabis businesses are expected, leading to lower interest rates, increased access to capital, and improved financial stability.

• The global implications of rescheduling could positively influence international agreements and treaties, showcasing the United States' leadership.

• The shift has the potential to stimulate growth, innovation, and compliance efforts within the industry, fostering economic development and job creation.

Negative

• Challenges persist in addressing issues with payment networks, leaving the industry cash-intensive due to regulatory restrictions.

• Changes to the Bank Secrecy Act regulations are unlikely in the near future, hindering progress in transitioning to traditional banking channels for cannabis businesses.

• State-level efforts to combat the illicit market will be essential despite the progress made in rescheduling cannabis to Schedule III, requiring careful navigation of compliance requirements.

Insights

Financial Analyst

The reclassification of cannabis from Schedule I to Schedule III could be a significant turning point for the financial health and growth opportunities for companies in the cannabis industry. Access to more favorable lending terms and traditional financial services is likely to enhance the operational capabilities of these businesses. Lower interest rates and increased capital availability may catalyze expansion and innovation, potentially leading to higher revenue streams. However, one must consider the ongoing cash-intensive nature of the industry due to current payment network issues, which might limit the immediate financial impact. Investors should monitor the progress of the SAFER Banking Act, as its passage could further ease financial restrictions on cannabis businesses, thereby influencing market valuations.

Legal Expert

The DEA's decision to move cannabis to Schedule III can alter the legal landscape significantly, reducing the legal risk associated with cannabis-related financial transactions. This could encourage more institutions to engage with the cannabis industry, broadening the investor base. Nonetheless, the persistence of cannabis within the Controlled Substances Act still poses compliance challenges. Investors should be cautious and seek out companies that have robust compliance mechanisms in place, like Safe Harbor Financial's proficiency in compliance management, which could become an even more valuable asset in this evolving regulatory environment.

International Trade Expert

The international ramifications of the U.S. rescheduling cannabis could have downstream effects on global markets, potentially altering international treaties and influencing the stance of other nations on cannabis policy. This leadership stance could create new markets and partnerships abroad for U.S. cannabis businesses, fostering global economic opportunities. As foreign policies might be influenced, companies well-positioned with international trade expertise could benefit in the long term. Investors should consider the global market growth potential alongside domestic regulatory advancements when evaluating the industry.

GOLDEN, Colo., May 01, 2024 (GLOBE NEWSWIRE) -- SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (“Safe Harbor” or the “Company”) (NASDAQ: SHFS) , a leader in facilitating financial services and credit facilities to the regulated cannabis industry, issued the following statement by Safe Harbor Financial CEO Sundie Seefried on the Drug Enforcement Administration (DEA) rescheduling cannabis from Schedule I to Schedule III on the Controlled Substances Act (CSA).

Safe Harbor Financial CEO Sundie Seefried:
The profound impact of rescheduling cannabis from Schedule I to Schedule III signifies a crucial shift in the perception of cannabis, recognizing its medical potential and solidifying its legitimacy in the financial realm.

From a banking and lending perspective, we believe that the reclassification of cannabis will broaden lending opportunities for cannabis businesses, leading to access to lower interest rates, increased access to capital and improved financial stability across the industry. This newfound access to traditional financing channels has the potential to stimulate growth, innovation and compliance efforts within the industry, ultimately fostering economic development and job creation.

Furthermore, the global implications of potential rescheduling cannot be overlooked. Elevating cannabis to Schedule III demonstrates the United States’ leadership on an international scale, and has the potential to positively influence agreements and international treaties with organizations like the United Nations and World Health Organization. This shift could hold significant weight, especially for other countries seeking to challenge current classifications and legalize cannabis sales.

Despite these positive steps forward to the sector and its lending and banking climates, we also believe that certain challenges will continue to persist, particularly in addressing issues with payment networks, leaving the industry predominantly cash-intensive. While substantial changes to the Bank Secrecy Act (BSA) regulations are unlikely at this time due the fact that cannabis remains under the Controlled Substance Act, we expect a reevaluation of BSA regulations sometime in the future. However, this will be driven primarily by the SAFER Banking Act should it pass. Lastly, state-level efforts to combat the illicit market will continue to be essential for supporting the continued growth of the legal cannabis sector.

While rescheduling cannabis to Schedule III represents progress, some of these regulatory challenges will necessitate careful navigation of compliance requirements. At Safe Harbor Financial, our expertise in streamlining operations and proficiency in compliance management sets us apart. By consolidating accounts with us, our clients are able to optimize efficiencies in navigating the BSA, which require maintaining rigorous compliance standards, and are crucial to uphold. As we continue to navigate this evolving landscape, we remain committed to providing innovative financial solutions tailored to the cannabis industry's needs, ensuring compliance with all regulatory mandates. We are prepared to embrace these changes and continue our mission of providing trusted financial services to cannabis entrepreneurs nationwide.

About Safe Harbor
Safe Harbor is among the first service providers to offer compliance, monitoring and validation services to financial institutions, providing traditional banking services to cannabis, hemp, CBD, and ancillary operators, making communities safer, driving growth in local economies, and fostering long-term partnerships. Safe Harbor, through its financial institution clients, implements high standards of accountability, transparency, monitoring, reporting and risk mitigation measures while meeting Bank Secrecy Act obligations in line with FinCEN guidance on cannabis-related businesses. Over the past eight years, Safe Harbor has facilitated more than $21 billion in deposit transactions for businesses with operations spanning over 41 states and US territories with regulated cannabis markets. For more information, visit www.shfinancial.org.

Forward-Looking Statements
Certain statements contained in this press release constitute "forward-looking statements'' within the meaning of federal securities laws. Forward-looking statements may include, but are not limited to, statements with respect to trends in the cannabis industry, including proposed changes in U.S. and state laws, rules, regulations and guidance relating to Safe Harbor's services; Safe Harbor's growth prospects and Safe Harbor's market size; Safe Harbor's projected financial and operational performance, including relative to its competitors and loan performance; new product and service offerings Safe Harbor may introduce in the future; the impact of recent volatility in the capital markets, which may adversely affect the price of the Company's securities; Safe Harbor’s ability to make the same or similar loans in the future; the outcome of any legal proceedings that may be instituted against Safe Harbor; other statements regarding Safe Harbor's expectations, hopes, beliefs, intentions or strategies regarding the future; and the other risk factors discussed in Safe Harbor's filings from time to time with the SEC. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "outlook," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject, are subject to risks and uncertainties. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond the control of Safe Harbor), and other assumptions, that may cause the actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These and other risks are discussed in detail in the periodic reports that Safe Harbor files with the SEC, and investors are urged to review those periodic reports and Safe Harbor’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, before making an investment decision. Safe Harbor assumes no obligation to update its forward-looking statements except as required by law.

Media Contact:
KCSA Strategic Communications
Ellen Mellody
570-209-2947
safeharbor@kcsa.com

Investor Relations Contacts:
Safe Harbor Investor Relations
ir@SHFinancial.org

KCSA Strategic Communications
Phil Carlson
safeharbor@kcsa.com

FAQ

What is the impact of rescheduling cannabis from Schedule I to Schedule III?

Rescheduling cannabis to Schedule III signifies a important shift in perception, recognizing its medical potential and legitimacy in the financial realm.

How will rescheduling impact lending opportunities for cannabis businesses?

Rescheduling is expected to broaden lending opportunities, leading to access to lower interest rates, increased capital, and improved financial stability.

What are the global implications of rescheduling cannabis?

Elevating cannabis to Schedule III demonstrates US leadership internationally and could influence agreements and treaties with organizations like the United Nations.

What challenges persist despite rescheduling cannabis to Schedule III?

Challenges remain in addressing issues with payment networks, leaving the industry cash-intensive, and navigating regulatory compliance requirements.

How is Safe Harbor Financial supporting the evolving cannabis sector?

Safe Harbor Financial remains committed to providing innovative financial solutions tailored to the cannabis industry's needs to ensure compliance with regulatory mandates.