Wisdom From The Women Leading The Cannabis Industry, With Sundie Seefried of Safe Harbor Financial

Trust your gut. I wish I had learned that earlier in my career. Today, I teach that to the young leaders in my shop now. I ask them what their gut instinct is because they are in a position of authority. They’ve got enough experience to pull together their feelings, history and experience and make the best judgment call. I wish I had learned that earlier.

As a part of my series about strong women leaders in the cannabis industry, I had the pleasure of interviewing Sundie Seefried.

When voters in Colorado approved Amendment 64 back in November of 2012, the state legalized cannabis for adults 21 years and older. A little more than a year later, the first official sale of adult-use cannabis in Colorado took place, making it one of the first two states, along with Washington, to legalize the sale and possession of cannabis for recreational purposes.

While this was an exciting time for the emerging cannabis sector, the industry faced a mountain of challenges, including a lack of access to banking and financial services. That’s when Sundie Seefried — a wife, mom, sister, daughter, painter and a four-decade veteran of the credit union industry — saw an opportunity. As the CEO of Partner Colorado Credit Union at the time, Seefried quickly recognized that the emerging cannabis industry needed access to standard financial services and that Colorado communities would be safer if the cannabis industry could access banking solutions.

That’s when Seefried set out to design a full scope cannabis banking program for Partner Colorado Credit Union known as the Safe Harbor Program to bring compliant banking and financial services to the rapidly growing U.S. cannabis industry. That program has now withstood the scrutiny of 16 federal and state exams to date.

Today, Sundie is the CEO of publicly traded Safe Harbor Financial (NASDAQ: SHFS), a leader in facilitating financial services and credit facilities to the regulated cannabis industry. The company is among the first service providers to offer compliance, monitoring and validation services to financial institutions and provides traditional banking services to cannabis, hemp, CBD and ancillary operators.

While meeting Bank Secrecy Act obligations in line with FinCEN guidance on cannabis-related businesses, Safe Harbor Financial currently manages approximately 1,000 cannabis-related relationships through its financial institution clients, implements high standards of accountability, transparency, monitoring, reporting and risk mitigation measures. Over the past eight years, Safe Harbor Financial has grown to nearly 600 accounts spanning 40 states and US territories with regulated cannabis markets and facilitated more than $20 billion cannabis-related transactions.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the cannabis industry?

In 2014, my contract was set to end in November with the Partner Colorado Credit Union (PCCU), where I was serving as CEO. My husband’s contract with his financial institution was also ending and our plan was to retire together. Right around that time, I met up with a couple of lawyers in Denver and some of them started talking about their cannabis clients. One of the people there was a really dear friend of mine, who asked me why his clients could not get banking. At the time, I was shaking my head no and told him that we’re not going down this path to banking marijuana — and at that time — we did call it marijuana. He asked me why not, and I said, because every time it comes up with the regulators, they just shake their head no, and they don’t say anything. I ended up telling him that I would go and speak to the regulator, but that I would likely get the “head-shake no” and then, I would return and say, I tried.

Well, the funny thing was that when I got to the regulator’s office, he handed me a bunch of papers and said, go forth, please do this. I silently said to myself, oh no, wrong answer. That’s not at all what I was expecting. However, he had told me that there were probably three CEOs in the State of Colorado who he would actually allow to do this, and if we were to come forward that I was on that list. That was a high compliment that I had to consider.

However, I knew this wasn’t going to be an easy task, so I started to do the homework. When I did, I ended up meeting with a cannabis operator, who actually became our very first client at Safe Harbor. They were some young fellas who had very young kids in car seats who would get their kids all bundled up at night and take them along as he and his wife would visit three different ATMs, where they deposited $9,000 into various bank accounts. At that time, he asked me, why do I have to make only $9,000 in deposits? I looked at him and I asked, how do you know that? The regulation, after all, is titled Bank Secrecy for a reason? He said his banker had told him that if he kept the deposit under $10,000, he wouldn’t get flagged and the account closed down because of the cash amount. I said — wow — not only can you not get banking, but you’re being taught to bank criminally in order to get into the banking system.

From that moment on, I knew I didn’t want to be the banker, who was forcing this new industry, which was legal in Colorado, to do things criminally in the banking world. Somebody had to open the transparency, and I just kept saying that to myself a hundred times: “Sundie, somebody has to do this.” When I shared my idea with the PCCU Board, I distinctly remember having my head down while I said, I want to talk to you about a new potential project, and it’s about marijuana. I look up and they’re just kind of looking at me in shock saying, do you really want to do this? One of them even asked, are you crazy? I said, maybe a little, but I think we can do this.

It took three months of education and then the board took a soft vote at the end. By now it’s September and my contract’s coming up, and the PCCU Board said that their biggest concern, other than the illegal status, was that my contract was ending in November and that I was starting a very major project. That’s when I gave the board my word that I would see the project through, but that we wouldn’t have a new contract until I knew I could do it and we could get through the regulators, the examinations, and then, build the program. We agreed we would just do it without a contract until such time that we knew we were moving in the right direction, and that is how I ended up in cannabis banking.

Can you share the most interesting story that happened to you since you began leading your company? Can you tell us what lesson you learned from that?

While I did all my homework, the regulators were surprisingly supportive. However, the biggest lesson I learned was that almost everybody around me was not in favor of supporting the cannabis industry with banking solutions. The risks were too great for most. Our certified public accountant (CPA) was one of my last stops to gain support, and I remember at one point she said to me, why am I your last stop by the way? And I told her that I thought she would be the most difficult one to get through, and before we sat down to lunch, she told me that I had to read Orange Is The New Black. I spent the weekend listening to audio of the book while I was painting, and I thought, okay, this is what the CPA is making me read, and the first question she asked me when I sat down at lunch was “are you okay if you go to prison for this?”

I’ll admit, I wasn’t expecting the question, and in some ways, I thought it was more humorous than serious, but I said to her, well, my answer to that is: “I am going to be self-reliant and this program is going to be written and developed by me and for my protection as well as the board’s protection. I’m going to count on my skill and talent not to go to prison and do my homework.”

With all the lack of support I faced from many, I realized that opportunity exists where others won’t go. I think that’s the greatest lesson I ever learned. Now, I always look for the places where people are saying “no,” and I forge a new path. If I had to give advice to other entrepreneurs out there, I would tell them that they are going to be alone. They’re going to have a lot of naysayers and that’s okay. Be self sufficient and really analyze why the lack of support exists, and ask yourself if you can manage it or not?

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

The cannabis industry was pretty much under the radar at the time that we started back in 2014 and early 2015. Nobody knew a lot about the industry, including myself. No one was raising their hand and saying, look at me, I’m writing a book on my marijuana business or I’m showcasing my company because the business of marijuana was federally illegal. Everyone was a bit nervous and scared even though they were moving forward with their businesses. Doing something that is federally illegal is not something to which you want to draw attention.

At the time, I thought I would be dealing with a lot of mom-and-pop businesses that maybe had one owner and a shop. Except, I was wrong. The first business that came to Safe Harbor had a cultivation license, three dispensaries and a manufacturing license and was essentially three businesses in one. The second one had eight dispensaries, three manufacturing facilities and a bunch of licenses. The third one comes in and they have 13 dispensaries and they’re all over the state of Colorado.

After this happened, I was working at home on the weekend and I started at 6:00 a.m. That weekend, I worked 26 hours. The reality of what I was facing was not at all what I was expecting. I made the mistake of thinking the cannabis sector was a small industry, and here it is, so complex and so big. All of a sudden I had to design a commercial program for the largest, most complex of cannabis companies. I did not leave my computer except to get some food and water, and definitely some wine at night. I thought to myself this is overwhelming, and I suddenly wondered if I could do this. But I had already met with the cannabis industry players and they were good people, who deserved banking. I’d heard their stories and I just couldn’t stop at that point in time…I couldn’t let them down. They were really counting on someone to step up and get this job done. I decided to tell my clients that if they did everything I asked them to do to help us get there that I would get this job done, and I did.

At that point in time, the lesson I learned was that I had created a program for the largest of cannabis companies, which allowed Safe Harbor to really thrive in the long run. When the mom-and-pops came in the door, I was always really excited because they were a piece of cake. So those false assumptions and working through something really difficult ultimately helped Safe Harbor’s efficiency and the cannabis industry get the banking services it deserves.

Do you have a funny story about how someone you knew reacted when they first heard you were getting into the cannabis industry?

It is kind of funny because you remember everything when you’re on a difficult journey like this. It was December 2014 and the PCCU Board had given me permission to launch the Safe Harbor Program on January 1, 2015. At the time, my mother was home from South Africa, where she had been running an orphanage project as a missionary. I had taken her out to dinner and I’m telling her, “oh my gosh, mom, we’re doing this and doing that…the cannabis industry is right in the middle of all this…there’s cash all over the place…and this is how unsafe it is.” I went through all the homework I had to do, and I’m teaching her everything about the cannabis industry that I’d learned to that point. Then, I looked at her and I said, “oh, mom, we’re doing this all under NDA so that if we crash and burn, we don’t hurt our reputation.” I told her that we couldn’t really tell anybody about this, and she said to me with a chuckle, “I’m pretty sure I’m not going to tell my friends nor any of the churches that support me what my daughter is doing at this point in time.”

Here’s the funny thing though, my mom is a conservative Baptist missionary, and I’m telling her that I’m getting into cannabis. She is a member of the credit union that I was running, and she didn’t say the cannabis operators didn’t deserve banking. Instead, she told me that it’s important to get that job done. I thought, well, if my mom can understand why the cannabis industry needs legal banking services, then certainly other credit union members could and would too.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Way back in the beginning of my career in 1983, I worked for a military credit union and had a direct supervisor who was a retired military officer. He did a lot of training with me and passed on a lot of the military training that he was afforded as an officer. It really came down to one instance when he was talking to me and telling me all about the Peter principle and how people reached the Peter principle by going one step beyond their ability to perform, and consequently, facing career disaster. At that point in time, I got really scared, and looked at him and I said, does everybody get to the Peter principle? He looked at me and told me that he didn’t think I had any limitations and that I’ll never reach a Peter principle dilemma.

It was that one level of encouragement that helped forge my career ahead and took the fear out of it. Now, when I look at the Peter principle and I teach people about it in my own shop, I tell them that it really boils down to a choice. Do you want to take that extra time to learn the next level or are you comfortable where you are at this point in time? So I’m not interpreting the Peter principle the way everybody else does because I do really believe it’s a choice of pushing your own envelope. That experience was really important in moving my career forward, and I am grateful for it.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Despite great progress that has been made we still have a lot more work to do to achieve gender parity in this industry. According to this report in Entrepreneur, less than 25 percent of cannabis businesses are run by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and/or c) society to support greater gender parity moving forward?

I’ve been in the finance world since 1983 and that too is a male dominated field. I think you need women and people of color who are leaders and do nothing but incrementally improve the situation for all of us, and that’s how we all rise together. It’s an understanding without having to say it to each other. I have a difficult time as a woman, but so do people of color and other minority groups. We’re all facing injustice getting into the higher echelons of any industry, so I think it’s important that we continue to work together. It’s the same thing in the investment world. I must have done 150 investor meetings in the last year, and three of them were with women. Until we get women, people of color and more minority groups running investment funds, the path will be more difficult. We have to be represented at the right levels — in the right industries — to support each other. That takes tenacity and fortitude. It takes understanding you’re not going to have all the support you need, but still you somehow manage to forge your way through without compromising who you are. You make it easier for those following behind you; incremental change moving us all forward.

You are a “Cannabis Insider”. If you had to advise someone about 5 nonintuitive things one should know to succeed in the cannabis industry, what would you say? Can you please give a story or an example for each.

Well, first in the cannabis arena, you would think that in an emerging market opportunity would be abounding all around you, but it is and has been an uphill battle from the very beginning. I remember one of the first clients coming in the door and saying, do you know what you’re getting into? And I was like yeah…no…but I’m here. I’m here to play. Well, he gave me one piece of advice. He’s said, face everything. It’s an uphill battle because it is. It is not an easy market to get into, and I think a lot of people in an emerging market think it’s easy. So that’s the first thing that one would find surprising.

Another thing I would put out there is that the cannabis industry is a business that takes a great deal of homework to understand. The complexity of the businesses have a great deal to do with the federal illegality, the combating of the illicit market and tax regulations surrounding a Schedule I drug classification. All of that makes this industry very complex. You get a lot of people who just want to jump into the cannabis industry and think, I can tackle this because I’ve been on Wall Street and I know how to do things. However, this is not like a normal business. What the cannabis industry goes through is very demanding. A lot of times people think you’re jumping into a big industry, but really it is a tight-knit growing industry. People know each other and word gets around. It isn’t a sector that you can get lost in and it is still at the size that if you do one thing wrong or you burn your bridges and it’s going to go through the industry. You have to be very careful with how you approach the cannabis industry.

I think the last thing I would say here is that emerging markets can bring out the best and worst in people. You really have to be careful with whom you do business because motivation matters. What you do or why you do things, especially in an emerging market matters and it sticks with you forever. You don’t lose that reputation, so I think that you have to be constantly watching for that one person who’s going to harm you and potentially, your reputation or business.

Can you share 3 things that most excite you about the cannabis industry?

I have not been bored since I started this project in 2014. The cannabis industry is constantly changing, so it’s like having a front row seat to this emerging market. How many times in one’s career do you get to work in an emerging market like the .com era or the cannabis industry? As a banker, I’ve seen everything change from day one and that challenge has kept me very interested and excited in what we’re doing for the industry — and banking by the way — was not all that exciting until cannabis came along.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest?

The first thing that concerns me is the lack of legislation to support the cannabis industry. It’s always difficult to get DC to do something, but this has been a slow burn. As hard as the Honorable Ed Perlmutter tried to move this forward, it is still difficult to get any type of bipartisan support to move the cannabis legislation forward. That is a concern for all of us, and the cannabis industry in particular.

Legalization would be the next step that would be a concern at some point in time. I think that it is the only way to move forward and be able to compete and optimize the industry. However, when we do get legalization, it’s always going to be one more problem that you get when you do something. For example, once we have legalization, how do you cross state lines? How do you have a national opportunity without the complexity of how the cannabis industry is doing business at this point in time? There has to be standardization in regulations so states can talk to each other and regulate cross-border transactions. That’s going to be what I see as the next big concern once cannabis is moved to a Schedule III under the Controlled Substances Act or descheduled.

What are your thoughts about federal legalization of cannabis? If you could speak to your Senator, what would be your most persuasive argument regarding why they should or should not pursue federal legalization?

Obviously the first one is it’s a thriving industry and if you legalize the plant, then you take a lot of the issues away in terms of Section 280E of the US Internal Revenue Code (26 U.S.C. § 280E), which is a tax provision that specifically applies to businesses engaged in the trafficking of controlled substances, as defined by federal law — and today, cannabis falls in that bucket. The tax benefit of the cannabis industry is huge to those states that have solid programs and would be huge to the nation on a federal level too. The other argument on an economic level is the ability to have this industry that is already legal in 38 states be able to compete on a global level. If we don’t give our national attention to the fact that we want America to continue to thrive as an economic leader across the world, we’re doing a disservice to the US economically. I think that the ability to compete globally is going to be important to the industry and will drive legalization at some point in time.

Today, cigarettes are legal, but they are heavily regulated, highly taxed, and they are somewhat socially marginalized. Would you like cannabis to have a similar status to cigarettes or different? Can you explain?

I don’t think cannabis is going to be regulated like cigarettes as much as I believe it’s going to be like alcohol. In fact, cannabis legalization in states is driving down alcohol sales, so there is an offset there. For example, if you look at the alcohol industry, it too is cash intensive. I think cannabis will remain cash intensive as are cigarettes and alcohol. Other cash intensive businesses remain that way simply because of the stigma, because it’s not widely accepted by everybody. Cigarettes, alcohol and gambling all have a stigma and they label them vices for a reason. So will regulations get rid of that stigma? I don’t think so entirely, no. I think it’s going to be more like alcohol and it’s a private choice on how you spend your time and your money to relax.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Trust your gut. I wish I had learned that earlier in my career. Today, I teach that to the young leaders in my shop now. I ask them what their gut instinct is because they are in a position of authority. They’ve got enough experience to pull together their feelings, history and experience and make the best judgment call. I wish I had learned that earlier.

What is the best way our readers can follow you on social media?

Readers can follow us on LinkedIn at https://www.linkedin.com/company/safeharbor-financial/. They can also check us out at https://shfinancial.org/.

Thank you so much for the time you spent with this. We wish you only continued success!