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The U.S. House of Representatives passing the SAFE Banking Act earlier this year was a win for the cannabis industry. If it is signed into law, it will allow for banks to do business with cannabis companies without the threat of the federal government cracking down on them. That in turn would allow cannabis companies to rely less on cash.

However, according to Rasul Raheem, senior counsel at Dykema in Detroit, even if the bill does become law, it may not be enough to get the big banks involved with cannabis.

"There is still a lot of risk in the industry," Raheem said. "It's probably still going to be a cash business."

Raheem, who previously worked in-house at Bank of America and LaSalle Bank Corp., said one of the issues banks foresee is the need for armored carriers because the cannabis industry remains largely a cash business. He said the larger banks will likely wait until the prohibition on cannabis is lifted before they participate in its marketplace.

Raheem did say many smaller banks are "biting at the bit to get in." While e-commerce companies have yet to begin offering their services to sellers of cannabis with THC, the main psychoactive compound, there are companies who are putting a toe into the industry.

Recently, Square Inc. announced it will begin payment processing services for CBD suppliers. Shopify Inc. has also jumped on board with CBD, short for the cannabidiol compound that has no known psychoactive effect, and will begin providing payment processing services for CBD suppliers.

Does your legal department have concerns doing business with cannabis companies even if the SAFE Banking Act is passed? Let me know by emailing me at [email protected].

What's Happening

GCs Take On Multidistrict Litigation

Forty-five general counsel and chief legal officers have signed a letter asking the Committee on Rules of Practice and Procedure to amend the Federal Rules of Civil Procedure concerning initial census, interlocutory appellate review and third-party funding litigation.

Bayer US LLC, Exxon Mobil Corp., GlaxoSmithKline LLC and Johnson & Johnson are a few of companies the top lawyers represent.

"The Committee's review of the procedures used in multi-district litigation proceedings (MDLs) comes at a point of crisis," the letter says.

Alex Dahl, general counsel of Lawyers for Civil Justice, told Corporate Counsel that in the course of normal litigation, frivolous claims are often dismissed early in the action.

"However, in MDLs, they often stay on the docket for years at a time without ever being vetted," Dahl said. "The initial census would bring clarity and certainty to MDL cases involving how to vet claims early in the case."

The letter also says there should be a rule requiring the disclosure of third-party litigation funding.

Child Actor Turned GC Sued

The former general counsel of Peter Thiel's Mithril Capital Management, Crystal McKellar, described the firm as "swampy" and said the firm's co-founder lied to investors. She said this in response to a suit the company filed against her in Travis County District Court.

The firm filed suit against the former child star of The Wonder Years seeking injunctive relief of more than $1 million claiming she started an anonymous letter writing campaign to recruit investors to a competing fund she was forming in San Francisco. In an interview with Corporate Counsel, McKellar said she will not be accepting any Mithril investors into her fund. She further claimed she did not engage in an anonymous letter writing campaign.

Mithril said in the complaint it hired a forensic handwriting expert who determined there was a "high degree of probability" that McKellar sent a letter to several senior executives at one of Mithril's largest portfolio companies.

What I've Been Reading

In an interview with Leaders League, Adriano Ribeiro, the GC of meat processing company JBS, said one of his biggest challenges is operating as a global company. The legal department, he said, has to develop a detailed knowledge of domestic and foreign operations. According to Ribeiro, JBS globally has approximately 40,000 cases under the management of 200 in-house and firm attorneys.

The trade partnership between the U.S. and Canada is expected to flourish, according to a report in Canadian Lawyer. Dan Ujczo, an international trade and customs lawyer at Dickinson Wright, said companies are looking for shelter from rising tariffs and global uncertainty. Canadian general counsel will need to prepare for changes coming by getting a better understanding of global supply and value chains, Ujczo said.

Jim Michalowicz, the senior manager of legal operations at TE Connectivity, is a client of one of the fastest rising artificial intelligence, contract review startups, according to a report in Bloomberg. The technology learns from a company's history of editing documents and learns to edit new documents based on that history. Michalowicz said the tech led to a 66% reduction in turnaround time for nondisclosure agreements.

Don't Miss

Monday, Oct. 14 to Wednesday, Oct. 16 – The Minority Corporate Counsel Association will be holding its Creating Pathways to Diversity Conference at the New York Hilton Midtown. The MCCA will host a Diversity Gala on the last night of the conference at the American Museum of Natural History.

Wednesday, Oct. 16 to Friday, Oct. 18 – Corporate Counsel will be hosting the Women, Influence & Power In Law conference at the Washington Marriott Wardman Park in Washington, D.C. Speakers will include Lori Bennett, general counsel at Aetion Inc.; Donna Bucella, chief compliance officer at 7-Eleven Inc.; and Emelita Hernandez-Bravo, head of legal operations at Fitbit.

Thursday, Oct. 24 to Friday Oct. 25 – The 2019 TECHGC National Summit will be held at the New York Stock Exchange. Speakers will include Brian Brooks, chief legal officer at Coinbase; Amit Khanna, general counsel at Knotel; and Ileana Falticeni, general counsel at GoodData.

On The Move

✦ Jack in the Box ✦ Phillip Rudolph will be leaving his role as the chief legal officer at the fast food restaurant in February 2020. He, along with two other executives, are leaving as the company focuses on a new management structure.

✦ Bill & Melinda Gates Foundation ✦ Lauren Bright and Keith Matthews have each been named general counsel for different parts of the foundation. Bright is GC in charge of supporting the U.S. program, global policy and advocacy and operations team. Matthews is GC supporting the global development, global health and global growth and opportunity programs.

✦ Myers Industries Inc. ✦ Andrean Horton, the chief legal officer of the plastics maker, will begin serving as interim CEO. She will serve in the role starting Oct. 25, when CEO Dave Banyard leaves to take another professional opportunity.