Safe Harbor Clears Debt, Strengthens Cash Position

Safe Harbor Financial (NASDAQ: SHFS) is entering 2026 in a much different position than it was a year ago.

In a letter to shareholders released Monday, CEO Terrance Mendez said the cannabis-focused fintech has eliminated substantially all of its corporate debt, built its cash position to more than $6 million and locked in a revised long-term agreement with Partner Colorado Credit Union that the company expects will generate at least $10.5 million in incremental cash flow through 2031.

“The single most important thing I can tell a shareholder today is this: we eliminated substantially all of the Company’s debt in September 2025,” Mendez wrote.

The amended PCCU agreement appears to be one of the biggest pieces of that story. Under the new structure, Safe Harbor said its share of loan interest income rises from about 35% to 65%, nearly doubling its participation in the portfolio it helps build and service. The company said the revised deal is expected to add roughly $9 million in incremental revenue and more than $1.5 million in cost savings over the 6.25-year term, assuming no deposit growth.

Safe Harbor also said deposits in emerging U.S. cannabis markets grew 29% over the 12 months ended Feb. 4, 2026, driven by more than 100 new accounts. According to the company, those newer markets now represent 31% of its total average deposit base. Mendez specifically pointed to New York, New Jersey, Illinois, Florida, Ohio and Kentucky as key growth states.

Beyond the balance sheet, Safe Harbor used the shareholder letter to frame itself as more than a cannabis banking facilitator. The company highlighted the rollout of its Fully Managed Cannabis Banking Program for financial institutions, the expansion of its lending capabilities from small startup funding to deals exceeding $25 million, and the growth of its managed services and partner network offerings, including insurance and payments.

Mendez, who is marking his first year as CEO, also said the company is positioning itself for possible federal reform. He pointed to what he described as a more favorable policy backdrop around cannabis rescheduling, while stopping short of making any firm prediction.

For now, the message to investors was simpler: Safe Harbor wants to be seen as leaner, better capitalized and built for a larger role in cannabis financial services.

Photo by Alexander Grey on Unsplash