Cannabis Investors Sue SPAC Deal Backers Over Diluted Stock

A cannabis company’s investors sued its private equity backers in Delaware, claiming Fireman Capital Partners LLC made “an egregious, self-interested cash grab” by diluting stock just before a “blank check” company acquired it and went into business with hip hop mogul Jay-Z.

The proposed class action was filed Tuesday in Delaware Chancery Court by former common stockholders of Left Coast Ventures Inc., a cannabis company that spun off from Privateer Holdings Inc.

The lawsuit concerns Left Coast’s merger with Subversive Capital Acquisition Company, a special purpose acquisition company that acquired another cannabis company, Jay-Z affiliate Caliva, at around the same ...