Cannabis banking services provider Safe Harbor Financial has set its sights on its first acquisition target since going public in September – cannabis banking and payments platform Rockview Digital Solutions Inc., also known as Abaca.
The two companies on Monday announced a $30 million cash-and-stock deal that is expected to close this quarter.
The deal will add 300 accounts to Safe Harbor’s portfolio and expand the firm’s operations to more than 30 states. The acquisition will also allow Safe Harbor to offer desktop and mobile banking, treasury management, payment processing, cash handling and logistics to its bank clients, the companies said.
Since going public via a special-purpose acquisition company (SPAC) deal last month, Safe Harbor Founder and CEO Sundie Seefried has expressed a desire to use strategic acquisitions to grow the firm into a “one-stop financial service provider to the cannabis industry.”
“[W]ith this access to capital markets now, we can really serve the cannabis industry with reliable services that they need,” Seefried told Banking Dive last month.
Abaca helps FDIC-insured banks provide traditional banking services to cannabis dispensaries by helping them manage their regulatory risk at scale. The firm claims it has processed more than $3 billion in gross transactions since its launch in 2017.
Following the close of the transaction, which is subject to regulatory approvals and other customary closing conditions, Safe Harbor said it expects to launch a payroll service this quarter.
“With their ecosystem of cannabis banking and finance platform, proprietary technology, strong financial institution and banking relationships, and experienced founder-led management team, we believe Abaca is the ideal platform to help us take a large step forward in scaling our capabilities and service offerings in building the complete cannabis fintech ecosystem," Seefried said in a statement on Monday.
Safe Harbor was established in 2015 as the cannabis banking arm of Partner Colorado Credit Union and was spun off from the credit union last year.
Seefried left her role as CEO of the Arvada, Colorado-based credit union to focus solely on growing the cannabis banking venture.
Since its inception, the cannabis banking services provider, which has operations in 20 states, says it has assisted in onboarding more than $12 billion in deposit transactions for customers.
Safe Harbor has expanded its executive suite since going public, tapping former Hypur Chief Business Development Officer Tyler Beuerlein as its chief strategic business development officer in April.
The company’s proposed acquisition of Abaca will further grow Safe Harbor’s leadership team.
Abaca co-founder and CEO Dan Roda will become executive vice president and chief operating officer of Safe Harbor, and Abaca co-founder and President Brian Bauer will serve as chief revenue officer once the deal is finalized, the companies said.