GOLDEN, Colo.–SAFE Harbor Financial, which began as a CUSO of Partner Colorado Credit Union before being sold as a fintech that provides financial services and credit facilities to the regulated cannabis industry, said it has successfully negotiated a favorable debt (the “Note”) modification with Partner Colorado.
According to the company, the agreement includes a two-year interest-only period, covering February and March 2025, the two months previously granted.
“These modified terms are expected to unlock more than $6 million in cash that would have otherwise been allocated to principal amortization over the next two years,” the company said in a statement.
It added the Note will maintain its 4.25% interest rate throughout the remainder of the term.
‘Financial Flexibility’
“As one of the largest shareholders, we realize that Safe Harbors’ success contributes to the success of our members,” said PCCU President and CEO Doug Fagan. “We expect this debt modification will provide Safe Harbor with the financial flexibility needed to pursue new opportunities. This agreement underscores our commitment to supporting Safe Harbor’s long-term success and stability.”
Added Terry Mendez, CEO of Safe Harbor Financial, in a statement, “Not only does the note modification significantly enhance our financial standing, I can confidently say that it also provides Safe Harbor with tremendous optionality as we enter this new chapter. The new agreement with PCCU provides us with flexibility to pursue additional opportunities to enhance and expand our service offering and reinforces our commitment to delivering long-term value to all stakeholders. The modification of the Note signifies a pivotal moment for Safe Harbor Financial.”
A Pioneer in Industry
Safe Harbor was a pioneer in providing financial services to cannabis companies when it was launched in 2015 and most financial institutions wouldn’t touch the industry due to fear of federal drug laws.
In 2022, Partners Colorado sold the CUSO to a special purpose acquisition company (SPAC), which was publicly traded, for $185 million ($70 million in cash and $115 million in stock).
Safe Harbor, however, reported a $35 million loss for 2022. In March of 2023, however, CPCU reversed much of its 2022 gain on the sale of the CUSO, resulting in a loss of $41 million. It later began restructuring the transaction.
For 2024, the $623-million Partner Colorado reported it was back in the black, posting $1.62 million in net income and net worth of 13.22%, according to its 5300.