President Donald Trump shifted some marijuana Thursday into a more relaxed drug classification that extends common tax breaks to some cannabis businesses and clears some of the regulatory smoke for credit unions and others that serve them.
However, the reclassification had an unclear impact on the stock price for Safe Harbor Financial Services, a Denver company providing financial services to cannabis companies. Its biggest stockholder is Denver's Partner Colorado Credit Union ($639 million in assets, 34,667 members), which spun off the company in 2022.
SHFS closed at $0.88 on Monday. As rumors emerged that the status change was coming, the stock moved up on high volume over the next two days to close at $0.98 on Wednesday. It opened Thursday at $1.04 but closed at $0.87.
CEO Terry Mendez said the Justice Department order was the most significant federal action on cannabis in 50 years, despite being limited only limited to medical cannabis and FDA-approved cannabis products.
The order moved those types of cannabis products from the Controlled Substances Act's Schedule I drugs, including heroin and other addictive drugs with no medical purpose to Schedule III, which includes anabolic steroids, ketamine and Tylenol with codeine.
"We expect this action, along with the broader rescheduling effort currently under review, to drive increased interest from banks and credit unions," Mendez said. "As perceived federal risk moderates, more institutions are likely to explore cannabis banking, expanding the addressable market for compliant, technology-enabled solutions.
Jason Stverak, DCUC's chief advocacy officer, said credit unions have operated for decades under a complex and often contradictory framework, serving businesses that are legal under state law while navigating uncertainty at the federal level.
"That tension has left many institutions cautious, limiting access to financial services for legitimate, state-licensed cannabis-related businesses," Stverak said. "Today's action begins to ease that long-standing conflict."
However, America's Credit Unions (AmCU), DCUC and Mendez said further reforms are necessary, especially passage of the SAFER Banking Act. The legislation would provide explicit statutory protections, reduce the risk of inconsistent enforcement, and establish uniform standards across federal regulators.
"Congress must pursue solutions like the SAFER Banking Act to provide credit unions with safe harbor protections, compliance framework and reduced operational risks, Greg Mesack, AmCU's SVP of advocacy, said. "These guarantees would allow credit unions the security to provide the cannabis industry with financial services."
Mendez said the biggest commercial benefit is for qualifying state-licensed medical operators. The reclassification allows them to claim standard business deductions. Schedule I bars those tax breaks, driving effective federal tax rates to 70% or more.
The tax relief "should improve operator liquidity, financial transparency, and credit quality, all of which are foundational to sustainable banking relationships," Mendez said.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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