Controversial former US attorney general joins CBD firm as legal adviser

Matthew Whitaker

(This story has been updated with more details and comments from Alternate Health.)

Toronto-based CBD company Alternate Health has tapped the former highest-ranking law enforcement officer in the U.S. to serve as outside counsel, officials announced Tuesday.

In announcing it was retaining former U.S. Attorney General Matthew Whitaker and his Kansas City, Missouri-based law firm, Graves Garret, Alternate Health also said it is leaving the marijuana market entirely.

Whitaker was a controversial figure during his short term running the U.S. Department of Justice under President Donald Trump. He was acting attorney general for three months after Jeff Sessions resigned in November 2018.

Whitaker’s role at Alternate will involve “strategically advising” the CBD company, according to a statement.

“I think there is serious potential in the CBD industry,” he said, “and everyone at Alternate Health will work hard to be a leader in the industry.”

The company said Whitaker will coordinate legal matters and develop its legal strategy as Alternate expands into new markets.

In early May, Alternate announced that it was entering the CBD market through a $20 million agreement to acquire Southern California-based Blaine Labs. Later that month, Alternate said it was pivoting to exclusively focus on “CBD product sales and cannabinoid medicine.”

Scott Holtby, vice president of communications, said the company’s pivot away from marijuana is not related to bringing Whitaker and his firm into the fold.

He said Alternate brought in “zero actual direct (marijuana) revenue, so that’s part of the reason we decided to change tack a little bit.

“We explored the recreational market in California … at this time we’re not as optimistic about the recreational (marijuana) space as we are about CBD due to the legal status of (marijuana) in the United States.”

Alternate has not yet signed any definitive deals to divest of its marijuana assets, he said.

Whitaker will also be charged with investigating “certain actions in Canada by a California-based competitor,” according to the company.

Holtby would not disclose the name of the California-based competitor.

Whitaker’s compensation will be through a traditional legal retainer. No stock options are part of the arrangement.

A former U.S. attorney in Iowa, Whitaker is not the first high-profile Republican to become involved in the cannabis industry.

Former U.S. House Speaker John Boehner joined the advisory board of New York-based Acreage Holdings last year.

Whitaker raised eyebrows in his short tenure over the agency that includes the U.S. Drug Enforcement Administration.

He was criticized for business ties to Trump and for comments critical of the investigation into Russian interference in the 2016 presidential election.

The state of Maryland challenged the legality of Whitaker’s appointment. The U.S. Supreme Court declined to hear the challenge, but Whitaker left the Justice Department soon after.

Alternate, which trades on the Canadian Securities Exchange as AHG, is also eyeing expansion in Latin America through a joint venture agreement with Oltecate Enterprises in Mexico.

Matt Lamers can be reached at [email protected]