Northern Lights Acquisition Corp.  (NASDAQ: “NLIT”) (“Northern Lights”), a special purpose acquisition corporation and SHF, LLC dba Safe Harbor Financial (“Safe Harbor” or the “Company”), the leading cannabis-focused financial services provider offering reliable access to banking and financing solutions for the cannabis industry, announced today the signing of a definitive business combination agreement that will result in Northern Lights’ acquisition of Safe Harbor from a subsidiary of Partner Colorado Credit Union, a Colorado-chartered credit union based in Arvada, Colorado (“PCCU”). Upon the closing of the transaction, Northern Lights and Safe Harbor will be led by Sundie Seefried, Founder and Chief Executive Officer of Safe Harbor. The boards of directors and managers of Northern Lights, PCCU, and Safe Harbor have unanimously approved the proposed business combination.

Established in 2015 by PCCU, Safe Harbor was formed to provide an unmet need – compliant access to banking and financial services for the rapidly growing U.S. cannabis industry. Over the past seven years, Safe Harbor has grown to nearly 600 accounts spanning 20 states. Additionally, Safe Harbor has processed over $11 billion in transactions with $4 billion in 2021 and has grown deposits at a 73% CAGR since inception. As legislative reform unfolds in the U.S., Safe Harbor’s platform is uniquely positioned to continue as the trusted, leading standard for cannabis financial services.

The regulated U.S. cannabis market currently consists of more than 70,000 cannabis-related businesses (“CRBs”), with sales that are expected to double to over $46 billion by 2025. Despite this rapid growth, there remains limited access to reliable cannabis financing and banking solutions caused by conflicting state and federal laws, unclear banking guidelines, and a lack of “safe harbor policy” for financial institutions. These dynamics have weighed heavily on cannabis-related companies, which currently operate without effective cash management solutions or traditional commercial financing options.

Safe Harbor addresses these challenges with its industry-leading financial services and commercial lending platform, providing its clients with increased safety and security through access to normalized banking and cash management. Through its proprietary risk management and compliance program, Safe Harbor operates under regulations promulgated under the Bank Secrecy Act (“BSA”) and additional FinCEN guidance, as demonstrated by passing 15 state and federal examinations since inception.

To help cannabis operators overcome their historic reliance on expensive, non-traditional forms of capital, Safe Harbor launched one of the first commercial cannabis lending platforms in late 2021. Since initiating the program, Safe Harbor has an actionable pipeline of over $300 million from both its existing and new clients. With its low cost of capital advantage, underpinned by industry-leading compliance and underwriting, Safe Harbor offers competitive rates with flexible structure and collateral packages ushering in a new wave of commercial capital for the cannabis industry.

Management Comments

“Safe Harbor is the most compelling investment opportunity we have encountered in the cannabis industry as both operators and investors. Safe Harbor is one of the only multi-state financial service organizations to successfully navigate the highly regulated cannabis banking industry, providing services that operators in other industries take for granted,” noted John Darwin and Joshua Mann, Co-CEOs of Northern Lights, both of whom will remain on Northern Lights’ Board of Directors upon completion of the transaction. “Setting the gold standard for regulatory compliance, as well as providing access to growth capital across the entire cannabis value chain, Safe Harbor is uniquely positioned to scale. We are confident that our collective experience in the cannabis industry and strong pipeline of lending opportunities are complementary to the incredible business Sundie and her team have established.”

Sundie Seefried, Chief Executive Officer of Safe Harbor, stated, “The acquisition by Northern Lights will allow Safe Harbor to advance its efforts to remain the premier cannabis financial services provider. Over the last seven years, our team has pioneered what many consider to be the industry standard cannabis banking platform by establishing strong internal processes and controls, and by complying with rigorous state and federal banking guidelines. Through the SPAC transaction, we believe Safe Harbor will be well-positioned to expand its suite of financial services for our existing and new clients and continue to support the growth of the cannabis industry at a very high level. Our goal is to become a ‘one-stop-shop’ for cannabis business financial needs.”

Transaction Overview

Northern Lights will acquire Safe Harbor, a subsidiary of PCCU for a total of $185 million, of which $70 million will be paid in cash and $115 million in shares of Northern Lights Class A common stock. The estimated post-transaction equity value of the Company will be approximately $327 million, assuming no redemptions by the stockholders of Northern Lights. The transaction will provide up to $107 million of gross proceeds (assuming no redemptions), including $117 million from Northern Lights’ cash-in-trust and a fully committed $60 million PIPE from institutional investors.

The transaction is subject to approval by the stockholders of Northern Lights and other customary closing conditions. Additional information about the proposed transaction, including a copy of the business combination agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Northern Lights with the Securities and Exchange Commission, and will be available at www.sec.gov.