SHF Holdings, Inc.

What they do

SHF Holdings operates a proprietary compliance technology platform (Safe Harbor Program) that enables financial institutions to offer banking and lending services to cannabis-related businesses (CRBs). The company is not a financial institution; it provides compliance monitoring, onboarding, reporting, and loan origination and servicing. It generates revenue through fee income, investment income, and loan program income. The platform is deployed across 41 states and territories.

Revenue drivers

• Asset hosting fees — Tiered fee based on average daily CRB deposit balances at partner financial institutions; rates range from 0.50% on first $25 million to 1.25% on balances above $125 million. Second Quarter 2026 average deposit balances were $108.4 million.
• Loan program income — Share of loan income on CRB loans sourced and serviced for financial institution clients; under Second Amended CAA, share increased to up to 65% in exchange for indemnification obligations. Q2 2026 loan program income was approximately $0.8 million, up 50.7% year over year.
• Investment income — SHF receives up to 100% of investment income earned on CRB deposits held at partner institutions, as amended in the First Amended CAA.

Recent performance

For Q2 2026 (quarter ended June 30, 2026), revenue was approximately $1.9 million, up 4.8% year over year. Loan program income grew 50.7% year over year to approximately $0.8 million. Average deposit balances increased 6.8% year over year to $108.4 million. Cash and cash equivalents were $5.7 million and stockholders' equity was $6.1 million as of June 30, 2026. Recent quarterly revenue: Q1 2026 $2.0 million, Q4 2025 $2.1 million, Q3 2025 $1.8 million.

Strategy

Management states it is investing in marketing, brand awareness, and systems to win new customers and increase average deposit balances. The company is expanding its consulting and managed services offering, and launched the Safe Harbor Pooled Employer 401(k) Plan, which has onboarded multiple clients and earned the endorsement of Canopy HR. In July 2026, it introduced the Safe Harbor Institutional Infrastructure-as-a-Service operating model for financial institutions. Management also emphasizes disciplined cost management and identifying further efficiencies.

Risks

• Concentration risk with PCCU — PCCU is the primary financial institution client and source of a significant majority of revenue; any loss or material adverse change to that relationship would materially impact liquidity and operations.
• Indemnification obligation — Under the Second Amended CAA, SHF is obligated to indemnify PCCU for up to 65% of net losses on loan defaults with no contractual cap on total exposure, creating potential significant cash outflows.
• Federal illegality of cannabis — Cannabis remains a federally controlled substance, and the regulatory environment is uncertain; changes in federal policy could affect the demand for compliance services or the legality of the business.
• Operating cash flow negative — Operating cash flow was negative $3.4 million in 2025, and the company has had negative net income in recent years, raising liquidity concerns despite cash of $5.7 million.

Outlook

Management says growth and execution are top priorities for the remainder of 2026, with continued investment in people, systems, and products. The company is building out its consulting and managed services, retirement plan, and Infrastructure-as-a-Service model, while maintaining expense discipline. Regulatory developments, including the DOJ's April 23 order placing state-licensed medical cannabis on Schedule III and the DEA's expedited hearing on broader rescheduling, are expected to expand the addressable market. The timing and scope of further federal action remain uncertain.