This paper describes the development of a magnetic attitude control subsystem for a 2U cubesat. Due to the presence of gravity gradient torques, the satellite dynamics are open-loop unstable near the desired pointing configuration. Nevertheless the linearized timevarying system is completely controllable, under easily verifiable conditions, and the system's disturbance rejection capabilities can be enhanced by adding air drag panels exemplifying a beneficial interplay between hardware design and control. In the paper, conditions for the complete controllability for the case of a magnetically controlled satellite with passive air drag panels are developed, and simulation case studies with the LQR and MPC control designs applied in combination with a nonlinear timevarying input transformation are presented to demonstrate the ability of the closed-loop system to satisfy mission objectives despite disturbance torques.