Sundie Seefried saw the opportunity to step up and help the underserved cannabis industry with the financial solutions they needed. That has since turned into a public company operating in 40-plus states. The venture, Safe Harbor Financial, has attracted funding from top-tier investors and has recently acquired Abaca.
In this episode, you will learn:
- Cannabis and legalization
- Financing for cannabis businesses
- Seefried’s advice when starting a business
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About Sundie Seefried:
Sundie Seefried is CEO and president of Partner Colorado Credit Union located in Denver, Colorado. She has served in the credit union industry since 1983 and as CEO since 2001. She holds a bachelor’s in business management from the University of Maryland and an MBA in finance from Regis University.
At Partner Colorado, Seefried has focused on establishing a culture of service and sales excellence. Under her leadership, and with the support of the board and the staff, Partner Colorado was named to a top-10 list of Best Places to Work in Denver for eight consecutive years, from 2005 to 2012.
Poised to retire in 2014, Seefried instead embarked on what has been the biggest challenge of her eventful career: designing and building a full-scope cannabis-banking program. The program she devised, tested, and launched has not only withstood the scrutiny of federal and state regulators, it has succeeded financially.
Just as important, by banking an industry that once had little choice but to execute all its transactions in cash, Seefried and her Partner Colorado team have made communities all over the state safer.
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Connect with Sundie Seefried:
Read the Full Transcription of the Interview:
Alejandro Cremades: All righty hello everyone and welcome to the deal maker show. So today. We have a very exciting guest. Do we have a powerhouse you know I think that we’re really going to enjoy you know this episode. You’re gonna find it very inspiring. You know, really interesting what she is doing. You know in a space that they is growing rapidly but they. Without a doubt you know we’re going to be talking about all the good stuff that we like to hear building scaling financing and all of the above so without furtherdo. Let’s welcome our guests today Sandy Sea Free welcome to the show.
Sundie Seefried: Thank you, Glad to be here.
Alejandro Cremades: So originally born in Upstate New York in Rochester so give us a walk through memory lane. How was life growing up.
Sundie Seefried: It was pretty interesting I but I have to say that you know the weather is so cold in rochester I don’t I have only been back once since I left when I was sixteen years old I just I appreciate the sunny Colorado that I have now and have very little reason most of my families moved out here. You know we went to Germany for several years my parents were missionaries I ended up staying in Germany and working for a credit union there that served all the military cut my teeth in banking starting 1983 have been in it since.
Alejandro Cremades: And now for you I mean you you did move quite a bit you know obviously as you were alluding to your parents were missionaries and I’m sure that you know the whole moving thing you know of packing up the backs going to like a new place. You know, new friends. You know, new everything I’m sure that. You know, doing that you know a few times you know I’m sure that they help you to perhaps you know shape up who you are today and and you know perhaps also you know in dealing with the unknown with the uncertainty. So how was that for you.
Sundie Seefried: You know it absolutely did help you know shape my personality and how I dealt with people because when you’re in a foreign country and you’re the foreigner and you’re the one who doesn’t speak the language very well and you’re counting on you know the graciousness of the the community around you. You really learn to be a very accepting person of all cultures and and appreciate all cultures. So I think that was 1 thing it really gave me I think the other thing is it’s true. You know it is uncertain when you go in, you don’t know what you’re looking at so when you face uncertainty like we did when we were going into cannabis banking. It was scary. But yeah, it still was more of an adventure because that’s the way my life was adventurous.
Alejandro Cremades: Adventures and adventures. It has been you know, especially you know in your case as you were saying you decided to go into banking. Ah, but you know you studied business. So I guess what got you into the world of business. You know why were you excited about business.
Sundie Seefried: Wow, you know that’s a very good question I actually started in accounting my first year of college but you know I I needed more interaction I really like to solve problems I really like to grow things I like to organize I think that’s the thing I like to do most organize things. And then watch them grow and thrive and and get systematic about it. So I I think that’s just natural fit for me other than accounting wasn’t ah it was not enough.
Alejandro Cremades: Now you you you were saying that you got into the whole you know space of banking you know back in the eighty s ninety s but eventually 95 that’s when you decide to come to the us and you know to to be part of partner Colorado created union I mean that sounds like ah you know, quite quite a change from what you were saying in Europe.
Sundie Seefried: It was but I needed to get back to school and get my Mba and so that’s what really drove me back to the states rather than get ah an an Mba in a foreign country I wanted to do it back here and and set some roots down so I did have some family in Colorado and so that’s where I started and. Believe it or not this is a true story the day after I got into country I had an interview and and I was in marketing at the time so I had 150 resumes throughout the country and here I am in Denver and I get an interview the day after I get into country and then have an offer within the week
Alejandro Cremades: Wow.
Sundie Seefried: And so that’s how I ended up at partner Colorado was rather serendipitous for me.
Alejandro Cremades: That’s amazing I mean and you were there for 26 years I mean 26 years I I don’t meet a lot of people at stay you know in one single company in the us I mean in Europe as you know you know and and and for the listeners.
Sundie Seefried: Um, yeah.
Alejandro Cremades: People tend to stay you know in companies for a long time. You know like they’re like lifers you know in in some of those companies but in the us you see the typical rotations. You know every 3 to 5 years You know there’s like something more exciting. Perhaps the grass is greener on the other side you know, whatever that is. But in your case 26 years why why for so long.
Sundie Seefried: In the banking world I don’t think that’s so unusual if you want to build a career and and I actually have a son who’s now starting out in banking and I said to my son I said it took me 17 years from an entry level position to make it to Ceo but it took me perseverance. I had to do the things that other people didn’t want to do when other people didn’t want to build the call center I raised my hand give it a shot when other people didn’t want to do something raise my hand and do it. You know, always trying to do something other people wouldn’t do so we had a chance to prove myself and then perseverance. You know you really can build your reputation I’ve only been with 2 financial institutions other than safe harbor at this point in time. But in banking that stability is super important in the job and and banks really need to rely on the people moving up like that and understanding the business. So. Get my personality.
Alejandro Cremades: And I think that you know I ah I’m a girl’s dad I have 3 daughters myself and I always tell my wife that they’re a little but they you know they’re getting big but I always tell my wife that there has never been a better time in history than now to be a woman you know I’m sure that in business. No I guess that. For you too I’m sure that it you’ve seen proli and you’ve experienced that transition from being the only you know a lady in the room full of men. You know, especially becoming the Ceo to now you know obviously you know things are changing but how was that you know for you too.
Sundie Seefried: Ah, you you want to hear something really funny. So I just went on. You know, just got back from eleven days on the road investor meetings left and right you know back to back and and over you know over 125 investor face to face and there were probably only 3 women.
Alejandro Cremades: Let’s hear it.
Sundie Seefried: In in the entire time that I was on the road and so I have this little theme song. It’s like okay, it’s raining men and I actually gets me laughing. You know are like ok, it’s raining men but I think you’re right? It is the time but it’s for a couple different reasons you know. And I think one of the biggest reasons is I was a single mother and I raised 2 sons by myself a long time. Those sons have no problem with women in leadership and I think you’re starting and then we’re seeing fathers like you who have daughters who realize they want their daughters to have the same opportunity. They had. So I think the combination of those 2 things is really going to make the world a better place for women and even other minorities as we go forward.
Alejandro Cremades: Ah, hundred percent so I guess say for you as you were you know going up in in in the latter you know with with a company with partner Colorado a credit union how was that the shift in in terms of you how how did you really like develop yourself you know, grew yourself so that. You were able to be at par with every single challenge that you were experimenting you were talking about it on raisingcing your hand but I mean racing your hand and making it all the way to Ceo I mean that’s quite a you know ah a steep climb.
Sundie Seefried: Yeah again, perseverance and and actually even getting into cannabis opportunity presents itself when somebody else doesn’t want to do something so when I am grooming my employees and I’m really big about promoting from within because. Talent is talent and you want these people to succeed behind you so you give it to them and help help them grow and and I just am I’m such a big believer in that that I’m always I’m always rather hiring from within and that really sends a message to the staff behind me and but it is. It is difficult. Every career is difficult. But if you take it personally you you just gotta you gotta to you got to get outside that it is personal. Career is personal but the fact of the matter is business is business and it isn’t always going to go your way when I left my first job in Germany it wasn’t a fun experience. It wasn’t because I wanted to I mean I I did I I chose to do that but I got denied a promotion and I did I said well fine I think I’m going to go back to the states because it was a military credit union mostly met around me so I had a problem competing but here’s what they said. He’s getting the job because he has an Mba and you don’t and I said well guess I got to fix that right? So you’re going to get those obstacles in your career and you just keep fixing them and stay with it until they can’t say no when I got the Ceo position I was one of 3 candidates at partner Colorado.
Sundie Seefried: Was the only one in the boardroom with an Mba couldn’t be denied so you see a hardship turned into something that got me the ticket into the boardroom. Finally.
Alejandro Cremades: Wow. So now let’s talk about getting the ticket to you know doing the spinoff for save Harbor Financial which is your baby. So how did that come about.
Sundie Seefried: Wow I was actually going into retirement that year and some friends said why won’t you bank cannabis why won’t you bank our clients and I said oh don’t even go there with me I’m getting ready to retire this was 2014 and and my husband and I were retiring at the same time. Our contracts were up but. I said I’ll look at it and when I started looking at and doing the research and realizing how dangerous Colorado was so you got to think of my altruistic background being in a missionary family and here’s the community in danger. There’s cash all over the place you’re hearing stories about you know. Families taking their kids out with 20 and $30000 in the car in the middle of the night looking for an atm so they can be inconspicuous and putting cash into the banks and then they’d have to find 3 atms because of limitations and you know you just start, you can’t. Unlearn what you learn at that point in time and you can’t just ignore it and and let other people be in harm’s way because at a credit union. We’re worried about all of our members in the community and so when I took took it to the board and I said this is what we’re living in right around us right next door they agreed something had to be done. And when I went to the federal insurers when I went to the regulators everybody wanted that money banked but nobody wanted to take on that risk because you could be prosecuted for banking that money as an officer or director. Ah.
Alejandro Cremades: So then what happened next? okay.
Sundie Seefried: So then it was really about staying alive so getting a little theme here but I had a theme song for those first several years and I still have that theme song and it’s called staying alive the beees right? You know it really was you know because you know regulators were really fearful of of cannabis. So the whole idea was.
Alejandro Cremades: I Love that.
Sundie Seefried: You know making it through exam successfully not getting shut down having sufficient activities on Bsa and risk management and you know they would bring in 20 bsa officers every time they had an exam and they would be learning off our back so that became good that became we became the standard but. We had to endure 16 state and federal examinations inside of 6 years when normally you would have 6 so once again, you had to persevere and many financial institutions would have dropped out under that pressure. But we persevered we built the program we had the front-runner advantage followed the industry. Front row seat. It was never boring I will tell you it was always finding a new problem mitigating that problem mitigating that risk you know I like to say we we did launch a very successful company out of this in 2021 and we’ve been cash flow positive. Since the very beginning neck income positive until we did the public transaction last year because it’s a little different but um I like to say that it wasn’t my brilliance that did this it was an unserved market and all I had to do was. Jump in and serve that market and follow the industry and provide what they needed in banking services to keep them safe and community safe and the credit union safe so that was a process over you know, 7 and eight years before we finally launched it because it got too big with partner Colorado it was too stressing.
Sundie Seefried: On the balance sheet. So we either had to cut the program back or launch it competitively on a national level and we chose to decouple it or spin it off into safe Harbor financial by itself.
Alejandro Cremades: So then and and and that sounds like quite the process but you know obviously now today you know is what we’re looking at and you know it’s it’s exciting now I guess the um you know for the people that are listening to really get it. What ended up being the business model of save harbor financial. How do you guys make money.
Sundie Seefried: Well, we make money so we’re actually a fintech platform now that you know was under the credit union. We still have a portfolio at the credit union. But we’re the centerpiece between the industry and the credit union. And we actually when when you look at our our relationships with financial institutions. We eliminate that risk of actually having to deal with the cannabis industry because it’s very complex and high risk and and you know you have to have a lot of compliance measures in place and we sometimes file a thousand reports a month which is. Pretty significant when you’re looking at the demands on this and the banks don’t necessarily want that you know they don’t want to allocate the resource and they don’t want to have to learn what we’ve learned in seven or eight years so we’re the perfect fintech platform between the bank and the industry. And we know the industry so well that we can underwrite the accounts and we can underwrite the loans. So we’re making ah money in terms of underwriting those accounts and then the compliance fees on those accounts because I just told you we file reports all the time and we have to watch the money we have to watch the business. We have to touch base with them at least quarterly. To make sure that there’s not changes and we have to make sure that they’re legitimate and legal businesses putting money into the system. So that’s really our job to make sure it’s compliant legal money and accounted for and then we take that off the bank but we fee share back.
Sundie Seefried: With the bank what we make and then of course we launched lending which is a very profitable program where they’re you know, paying interest rates at this point in time between 8 and 14% and it’s a premium because again, it’s a complex industry. But some of the rates that they get out there from other providers are between 18 and 36 so we try to make it a little more normalized but there is always a premium on lending and and you know and and it’s just because of the risk and it’s ah federally illegal still.
Alejandro Cremades: And and also you know as you’re mentioning the word illegal. How did you guys go about fending off the black market here.
Sundie Seefried: Ah, that’s scary I think that was one of the scariest things when we first got into it in terms of what happens if we find someone who’s illegitimate what happens if we find somebody who’s who’s money laundering you know how do we keep ourself out of harm’s way that way. So. I put a barrier in place right away and the barrier was all these rules to bank with me. You got to follow 20 different rules and if you break 1 of these banking rules then chances are you’re not going to have compliance in your shop so make it difficult for them to actually get an account. Have to go through a lot of due diligence. It takes sometimes 2 to three weeks to get somebody through due diligence that we trust their business enough to open the bank account and so that’s the first thing and if they if they lack any compliance during that time if they push back on anything. We always had a role. Don’t pursue them. Because if they don’t want to be compliant. We don’t want to bank them so that’s the first thing but then the second thing is we’re always looking at their validation of money. We’re always making sure the money is legitimate against the taxes they’re paying and it’s legitimate against the. Deposits they’re making and the sales that they report to the state. So we had a lot of touch points that we’re having to review monthly to make sure it’s legitimate money and so we can legitize the money which makes the financial system the federal reserve federal agencies feel comfortable with what we’re putting in there does that mean it doesn’t slip in no because a good.
Sundie Seefried: Compliance program not only tries to prevent access to the banking system but a good compliance program finds it because they do slip in or let’s say ownership changes and somebody who’s Nas so legitimate buys into a company to utilize that company as a shell to put money in. So you always have to be watching for that too and that’s a little more difficult but what we have found is that we work really well with law enforcement when that happens law enforcement wants to find that black market and the industry wants the law enforcement to find it because they only want legitimate players around them competing. Not the black market. So banking is really crucial in fighting that black market presence I believe.
Alejandro Cremades: So as we’re thinking about you know, um, being compliant and you know rules and regulations what about federal versus you know state level you know rules applied to the cannabis industry.
Sundie Seefried: Yeah, so I think federal legalization is a long ways off I just don’t think it’s going to happen. You’ve got too many federal agencies out there who are going to fight legalization. You know one of the biggest ones is the Irs. They’re collecting so much tax money on this industry at this point in time. Unfortunately there’s rules that say um, anything that’s schedule 1 or a schedule 2 like cannabis is schedule one. They can’t take any normal business deductions. They can only take cost of goods which really increases their effective tax rate. So that’s very difficult on it. So I think you’d find the doj can’t completely do their job and fight crime if it’s taken off the schedule and and because there’s such a black market existing in plain sight and we know that there are shops opening in California or New York they have no licenses. So until we weed out some of these illegitimate players and until the black market is minimized and until banking is optimized across the country as the delineating factor. You can’t get a bank account. We have to ask why it can’t keep a bank account. We have we have to ask why and those are the things where. Law enforcement can look at those particular companies. So I don’t think at the federal level. It’s going to legalize even if it does legalize at the federal level. You now have all the states what 37 irty seven or 38 states who have created created their own regulatory environment. So.
Sundie Seefried: How fast will it be for those states to start looking at the other states and allowing interstate commerce between states because the regulations are going to be different and if California has a market with excess product does Colorado really want. To have that business between California and Colorado because Colorado’s got a very stable market. So I think there’s a whole lot of other factors. They’re going to play in that that the illegal status helps the industry doesn’t harm the industry other than the tax issue for the most part.
Alejandro Cremades: And why would you say that the banks don’t really want to touch this segment. You know what is what is driving that.
Sundie Seefried: How dear.
Alejandro Cremades: I think that the I lost you there for 2 seconds so we’ll edit this. Don’t worry so what? What do you think Sunday can you hear me sunday.
Alejandro Cremades: And Sunday what? What? What do you think that the other banks are really not even touching this base. What’s going on.
Sundie Seefried: Well, it’s still a very difficult task. Um the biggest elephant the elephant in the room is really bank secrecy and that’s been around for decades and bank secrecy is really about fighting crime. Not just the black market and drugs. But you know human trafficking. Arms control that that kind of thing and so usually a lot of that’s tied together and it’s always cash intensive business I mean they deal in cash and so we’re always looking for cash and cannabis is cash business as well. 75% we process you know we’ve processed about almost nineteen billion dollars and in cash in the last eight years of the cannabis industry and put it into the system probably 75 to eighty percent of that was cash banks don’t want to touch that much cash because of the bank secrecy obligation the reporting obligation and the possibility of. Illicit funds flowing through their financial institution and not having enough resources on it. The other thing is that right now they could prosecute officers and directors for actually banking the cannabis industry and call it money laundering at the federal level. They have not prosecuted. Anybody.
Alejandro Cremades: M.
Sundie Seefried: To to date and every year they allow us to do it as one more year obviously ah of quasi-permis in my book. But I’m always rationalizing my my risk away. Anyhow. Um, so I think that ah the the biggest barrier is really bsa and if you don’t do Bsa right? Some financial institutions have been hit with fines over one ah $100000000 so we on the other hand launching this company have been doing it for 9 years gone through 16 exams which has allowed us to perfect. As hard as it was it certainly allowed us to perfect the measures we take to protect the financial system.
Alejandro Cremades: And now now in this case for you guys. How did you go about capitalizing the business I know that you guys recently went public.
Sundie Seefried: Yes, well, the good news is that we still have cash on the balance sheet over $8000000 so we didn’t raise cash to do operations since we’ve been in compositive for 8 years We had cash going into the deal. It was just really about the getting on getting the transaction and you know having access to that capital because if we want to now expand on the national level and we are actually serving um over forty states at this point in time but we’ve never optimized. Our marketing position. We’ve never optimized business development. We did everything by word of mouth. So now we’re just going full fledged forward and we’re going to address the entire market across the country with a sales force and with a business development officer and this lending program and. Then we’re also going to look at other services that complement ours. We now just want to provide banking access. We want to be able to provide insurance opportunities because anything that’s difficult for the the and industry to get you know they have a hard time getting broker dealers to manage their finances and. And so we’re looking at rolling up some of the best of the best in the long term. That’s when we would probably have to go back to the market and get some capital right now we have some low hanging fruit that we can actually afford on the balance sheet like working with other.
Sundie Seefried: Institutions that want to exit the business and purchasing their portfolio or combining resources that type of thing we’re seeing a consolidation in the financial services for the cannabis industry we have ah we all did it alone up to this point but competitive pressures are now going to push us together I think.
Alejandro Cremades: And and up until now how much capital have you guys raised too late 23,000,000 got it and now why going public versus you know, using the traditional sources. You know.
Sundie Seefried: Um, um, 23000000
Alejandro Cremades: More in the private side of things.
Sundie Seefried: Well, you know in hindsight I have to agree that’s a good question I think that we weren’t as familiar with the capital markets as we needed to be. We probably could have done a little more research. We actually. Um, looked at private equity. We looked at specs. We figured the timing was best if we went with a sp and could do a quick turnaround onto the Nasdaq and get access to that capital. So I think that’s why the sp won out in the end. Not to mention that the fellas. That were ah managing the spec transaction used to be safe harbor clients at 1 point in time so they understood the cannabis industry and they understood the difficulties of the financial services. You know, being there for the canvas industry.
Alejandro Cremades: And when you say 23000000 was that all in 1 tranch because I see at least you know on on other websites that there was like 2 2 transactions reported 1 in September of last year and then another one in november.
Sundie Seefried: No, we only ah raised ah the transaction we did in November was the acquisition of a company so that was our first acquisition and that was off the balance sheet. We didn’t go raise capital for that. We we paid that off the balance sheet with stock and cash over time.
Alejandro Cremades: Okay, got it.
Sundie Seefried: So with that one we actually finalized the fintech platform model that was a real important one to us as well as put one of our competitors quasicompeitors out of business and pick up their bank accounts with their financial institutions. So it was ah also a good growth mechanism for us.
Alejandro Cremades: Okay, got it so all in all in terms of capital raised. You know it’s been about 23000000 is that I mean on top of that has there been any other you know capital that you guys have put into into the business besides that 23000000
Sundie Seefried: No, and quite frankly that 23000000 didn’t come to safe harbor it was actually cash payment to the parent company from which we decoupled partner Colorado credit union so we really didn’t get that money on the balance sheet. It was part of the.
Alejandro Cremades: Okay, got it.
Sundie Seefried: Purchase agreement with partner Colorado.
Alejandro Cremades: Okay, understood now now let’s talk about you know, let’s shift gears here like if you were to let’s say so go to sleep tonight and you wake up in a world where the vision of the company is fully realized what does that world look like.
Sundie Seefried: Um, ah I’m retired and on the beach. Ah so that would be a good thing right? because that would say we were successful. But I think the vision would be that. You know we have ah still retained the market leadership position that we’ve held for the last eight years we are banking several ah several of the states we’ve we’ve got penetration in the states similar to what we have in Colorado because that was our home base to begin with. And we’ve been able to produce ah the the largest market share and that then allows us to loan out our money and then build that portfolio and I tell you what I think happens at that point in time I think we become a prime target because I think as legalization nears I think. You know some point in time you know a financial institution would a big financial institution would rather buy something than build it because of all the effort we put into creating something like that.
Alejandro Cremades: And now if we were to take a look at the future ah or actually not not the future like we were doing now but more the past and doing it with a lens of reflection if you were to go back in time. And you were able to have a chat with your younger self maybe that younger self that they you know is now getting into the into the banking you know industry or you’re ready in the backing industry but really wondering you know what’s missing and you were able to give yourself 1 piece of advice before launching a business. What would that be and why given what you know now.
Sundie Seefried: I would tell myself not to open my mouth so much not to be so I assertive and in mannerism to. But that’s also perhaps a gender thing you know I don’t think in the banking world. It’s still a man’s world for ah the most part as is the investment world. Um, but I I didn’t make a lot of friends just being myself and and speaking up because I think my my parents didn’t raise this to. Think Gender was an issue one way or another. But I think there were a lot of men in my path that I probably was a little too assertive and made them nervous and may have slowed my career down. So I think I would have tried to know my audience better versus being myself. Only.
Alejandro Cremades: So Sunday for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.
Sundie Seefried: Well, you know I have a very active Linkedin account that you can look me up or you can find me through the website and through info and that’ll get to me or you can do Sunday dot cfreed at s hfinancial dot org.
Alejandro Cremades: Easy enough. Well Sunday. Thank you so much for being on the deal maker show today. It has been an honor to have you with us.
Sundie Seefried: Ah, thank you appreciate you having me what’s fine.
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