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What Is Going on With SHF Holdings (SHFS) Stock?

  • Cannabis bank Safe Harbor Financial completed its SPAC and now trades as SHF Holdings (SHFS).
  • The company hopes to handle financial transactions on behalf of the legal cannabis industry.
  • The deal was downsized from $227 million announced in February.
SHFS stock - What Is Going on With SHF Holdings (SHFS) Stock?

Source: H_Ko / Shutterstock.com

SHF Holdings (NASDAQ:SHFS) is the new name for pot industry specialty banker Safe Harbor Financial after the Special Purpose Acquisition Company (SPAC) Northern Lights completed its acquisition.

The stock jumped over 50% at the open on Oct. 5 and was over $10/share by 1 p.m. This put the market capitalization at over $154 million.

SHF Holdings hopes to solve the biggest problem for the legal pot industry, which it calls cannabis banking. With marijuana still classified alongside cocaine and heroin under federal law in the U.S., this can be difficult.

More About Safe Harbor

Safe Harbor was founded by former Partner Colorado Credit Union executive Sundie Seefried. The credit union has a 60.8% share of the deal.

Northern Lights executives John Darwin and Josh Mann, both with experience in the cannabis business, control about 40% of voting shares. Colorado was the first state to legalize marijuana sales in 2012.

The deal claimed an enterprise value of $227 million when it was announced in February. The numbers were adjusted down before the deal closed. The Private Investment in Public Equity (PIPE) part of it, in the form of preferred shares, closed at $20.45 million. Partner Credit Union is eventually supplying $70 million.

Since Colorado made recreational pot legal other states have legalized pot sales. But the laws and regulations differ greatly, and the legal pot must continue to compete with the illegal variety. SHF’s 8-K says it earned about $838,000 on revenue of $3.5 million for the six months ending in June.

SHFS Stock: What Happens Now

If SHF Holdings can cut through the legal fog on behalf of growers and sellers, it can build a sizable business. But the float is just 11.6 million shares, meaning the stock will be highly volatile. Speculators on Stocktwits are hoping it will finish the day above $12.

Where SHFS stock goes next is up to the founders and the law.

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.


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