NLIT - Safe Harbor To Go Public Through SPAC
Cannabis banking company Safe Harbor Financial (SHF, LLC) will go public through the SPAC (special purpose acquisition corporation) Northern Lights Acquisition Corp. (NASDAQ: NLIT) has chosen it for the qualifying transaction. Safe Harbor is a subsidiary of Partner Colorado Credit Union, a Colorado -chartered credit union based in Arvada, Colorado . Safe Harbor will be led by Sundie Seefried , Founder and Chief Executive Officer of Safe Harbor.
“The acquisition by Northern Lights will allow Safe Harbor to advance its efforts to remain the premier cannabis financial services provider,” said Seefried. “ Over the last seven years, our team has pioneered what many consider to be the industry standard cannabis banking platform by establishing strong internal processes and controls, and by complying with rigorous state and federal banking guidelines. Through the SPAC transaction, we believe Safe Harbor will be well-positioned to expand its suite of financial services for our existing and new clients and continue to support the growth of the cannabis industry at a very high level. Our goal is to become a ‘one-stop-shop’ for cannabis business financial needs.”
Safe Harbor was formed in 2015 by the PCCU to provide an unmet need, which was compliant access to banking and financial services for the cannabis industry. Over the past seven years, Safe Harbor has grown to nearly 600 accounts spanning 20 states. Additionally, Safe Harbor has processed over $11 billion in transactions with $4 billion in 2021 and has grown deposits at a 73% CAGR since inception. Safe Harbor addresses these challenges with its industry-leading financial services and commercial lending platform, providing its clients with increased safety and security through access to normalized banking and cash management. Through its proprietary risk management and compliance program, Safe Harbor operates under regulations promulgated under the Bank Secrecy Act and additional FinCEN guidance, as demonstrated by passing 15 state and federal examinations since inception.
Transaction Details
Northern Lights will acquire Safe Harbor for a total of $185 million , of which $70 million will be paid in cash and $115 million in shares of Northern Lights Class A common stock. The estimated post-transaction equity value of the company will be approximately $327 million , assuming no redemptions by the stockholders of Northern Lights. The transaction will provide up to $107 million of gross proceeds (assuming no redemptions), including $117 million from Northern Lights’ cash-in-trust and a fully committed $60 million PIPE from institutional investors.
“Safe Harbor is the most compelling investment opportunity we have encountered in the cannabis industry as both operators and investors. Safe Harbor is one of the only multi-state financial service organizations to successfully navigate the highly regulated cannabis banking industry, providing services that operators in other industries take for granted,” noted John Darwin and Joshua Mann , Co-CEOs of Northern Lights, both of whom will remain on Northern Lights’ Board of Directors upon completion of the transaction. “Setting the gold standard for regulatory compliance, as well as providing access to growth capital across the entire cannabis value chain, Safe Harbor is uniquely positioned to scale. We are confident that our collective experience in the cannabis industry and strong pipeline of lending opportunities are complementary to the incredible business Sundie and her team have established.”