SHF Holdings, Inc., d/b/a/
Safe Harbor
Financial (“Safe Harbor” or the “Company”)
(
NASDAQ: SHFS), a leader in facilitating banking,
payments and financial services to the regulated cannabis industry,
announced that it has submitted comments to the Justice Department,
following its recent proposed rule to reclassify cannabis from
Schedule I to Schedule III of the Controlled Substances Act
(“CSA”), consistent with the view of the Department of Health and
Human Services (“HHS”) that cannabis has a currently accepted
medical use as well as HHS’s views about marijuana’s abuse
potential and level of physical or psychological dependence.
For the past 54 years,
cannabis has been categorized as a Schedule I controlled substance
under the Controlled Substances Act. Schedule I drugs, substances
or chemicals are defined as drugs with no currently accepted
medical use and a high potential for abuse.
The publication of
this proposed rule initiates a public comment period that will
remain open until July 22, 2024. Comments can be submitted
electronically via the Federal eRulemaking Portal using the
reference: ‘Docket No. DEA-1362.’
Safe Harbor Financial Chief Legal
Officer Donnie Emmi:Safe Harbor Financial welcomes the
proposed rule to reclassify marijuana from Schedule I to Schedule
III of the Controlled Substances Act. This reclassification
represents significant progress in aligning federal policy with the
growing recognition of the medical benefits of cannabis. However,
it is important to clarify what this potential change does and does
not mean for our industry.
First and foremost, the reclassification does
not make marijuana legal, as it remains an illegal substance under
federal law. From a banking perspective, the compliance
requirements under the Bank Secrecy Act (BSA) and Anti-Money
Laundering (AML) regulations remain unchanged. Banks must continue
to adhere to these stringent regulations to avoid significant fines
and penalties.
The reclassification to Schedule III is expected
to have several positive impacts on the cannabis industry. Most
notably, it will alleviate some of the severe tax burdens imposed
by Section 280E of the Internal Revenue Code. Currently, cannabis
businesses cannot deduct many of their operating expenses, leading
to inflated tax liabilities. The change to Schedule III will allow
these businesses to deduct expenses more akin to standard business
operations, potentially adding significant amounts to their balance
sheets. For example, some large operators could see more than $100
million added to their balance sheets, enabling them to reinvest in
and expand their operations and create jobs.
Overall, the rescheduling of cannabis will
create a more favorable business environment for Safe Harbor
Financial and the businesses we serve – enabling each to expand its
services, reduce operational risks and capitalize on new market
opportunities. While this does not change the illegality of
cannabis or change compliance requirements under the Bank Secrecy
Act, the move to Schedule III represents progress.
For Safe Harbor, this reclassification
underscores our continued relevance and importance in the cannabis
financial services sector. Despite fears that regulatory changes
might diminish our role, the reality is quite the opposite, as the
expectation is that the industry will grow considerably, increasing
the need for our unique service platform. The reclassification is
likely to lead to increased banking and transaction activity among
our clients, benefiting Safe Harbor through higher transaction
volumes and enhanced financial stability.
In addition, the cannabis industry remains
cash-intensive, similar to other sectors like liquor stores,
tobacco and adult entertainment venues, due to restrictions on
credit card processing and other financial services. As the
regulatory landscape evolves, Safe Harbor will remain a crucial
partner for cannabis and other high risk banking businesses.
In conclusion, Safe Harbor remains committed to
supporting the regulated cannabis industry through these changes.
Our first-mover status and deep industry expertise position us
uniquely to continue providing essential financial services,
ensuring the growth and success of our clients.
About Safe
HarborSafe 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 nine 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 StatementsCertain 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 Securities and Exchange Commission. 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.
Media Contact
InformationSafe Harbor MediaEllen
Mellody570-209-2947safeharbor@kcsa.com
Investor Relations Contact
InformationSafe Harbor Investor
Relationsir@SHFinancial.org
KCSA Strategic CommunicationsPhil
Carlsonsafeharbor@kcsa.com
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