SHF Holdings Inc (NASDAQ: SHFS) is a financial compliance services company that enables banks and credit unions to offer banking services to cannabis-related businesses (CRBs). It makes money through investment income on CRB deposit balances held at partner financial institutions, account activity fees, and a share of loan program income, all earned under a commercial alliance agreement (CAA) with its primary partner, Partner Colorado Credit Union (PCCU). SHFS is not a chartered financial institution; it sits between CRBs and financial institution partners, providing the BSA/AML compliance infrastructure, due diligence, and technology that most banks decline to build themselves. As of FY2025, the company reported an operating loss of $5.4 million, cash of $6.8 million, and net working capital of $5.7 million, with management disclosing substantial doubt about its ability to continue as a going concern. In December 2025, SHFS acquired substantially all assets of 420 IT Solutions, adding on-site due diligence review capabilities for cannabis-banking financial institutions.

Revenue model

Revenue comes from three primary streams under the CAA with PCCU: investment income tied to the Federal Reserve's IORB rate applied to CRB deposit balances held at PCCU (with the Company receiving 100% of that income as of January 1, 2025); account activity fees based on active CRB accounts; and a share of loan program income, increased from approximately 35% to 65% under the Second Amended CAA executed February 4, 2026, retroactive to October 1, 2025. A tiered asset hosting fee structure replaced a flat 1.00% rate, ranging from 0.50% on the first $25 million of average daily balance to 1.25% on balances above $125 million. A managed services business line serving CRBs directly generated initial but immaterial revenue in FY2025.

Products and services

BSA/AML compliance platform for cannabis banking; account activity fee services for CRB deposit accounts; loan program participation through PCCU; on-site due diligence review services (acquired via 420 IT Solutions, December 2025); money market account program for CRB clients (introduced 2024); managed services including outsourced finance, accounting, treasury, IT, and HR for CRBs (early-stage as of FY2025).

Customers and end markets

Two customer types: cannabis-related businesses (CRBs) that need access to banking services, and financial institutions (banks and credit unions) seeking to enter or expand cannabis banking programs. The end market is defined by state-legal cannabis operators that cannot access standard banking due to federal Schedule I status of cannabis. Demand is directly tied to the number of state-licensed cannabis operators and the willingness of financial institutions to serve them.

Value-chain role

Compliance infrastructure intermediary sitting between cannabis businesses and chartered financial institutions. SHFS provides the regulatory, technology, and due diligence layer that allows partner institutions to accept CRB deposits and extend loans while meeting FinCEN 2014 guidance and BSA/AML requirements. It holds no banking charter and does not take deposits directly.

Geographic exposure

United States. The filing does not specify revenue by state, but the business is bounded by state-legal cannabis markets and the reach of SHFS's financial institution partnerships.

Source: SEC 10-K, filed 2026-04-15

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