Exhibit
10.13


 


COMMERCIAL
SUBLEASE AGREEMENT


 


THIS
COMMERCIAL SUBLEASE AGREEMENT (the "Commercial Sublease Agreement" or "Sublease"), made on this 14th day of
August 2014 by and between Diego Pellicer Worldwide Inc. a Delaware Corporation, having an address at 3496 Fairview Way, West
Linn, OR 97068 ("Sublessor") and DPCO, Inc a Colorado Corporation, having an address at 1 South Harrison Street, Denver,
CO 80209 ("Sublessee").


 


WHEREAS,
on the 14th day of August, 2014, Sublessor has entered into a commercial lease agreement with the Landlord (2949 W. Alameda Ave.
LLC) for a period starting from August 1, 2014 and ending on July 31, 2019 (the "Master Lease"). A copy of the Master
Lease Agreement is attached hereto; and


 


WHEREAS,
Sublessee and Sublessor wish to enter into this Commercial sublease Agreement, where under the Sublessor will sublease the Premises
to Sublessee.


 


Premises:


 


Subject
to the terms and conditions of this Agreement, Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor,
the following Premises:


 


		●	Building
                                         and property addressed as 2949 W Alameda Ave, Denver, CO 80219 and described as a +/-
                                         3,300 square foot retail structure, (the "Premises").



 


Term:


 


The
term of this Commercial sublease shall commence on the 14th day of August, 2014 and shall continue until the July 31, 2019.


 


Sublease:


 


This
Commercial Sublease Agreement will be subject to the remaining terms and conditions contained in the Master Lease. In such an
event, the terms of this Commercial Sublease Agreement shall control over the Master Lease. The Sublessee hereby fully agrees
acknowledges and agrees to perform all of the Sublessor's duties and obligations under the Master Lease.


 


Rent*:


 


For
the term of this Agreement, the Sublessee shall pay to Sublessor the base rental of $26,300 per month plus NNN charges. The monthly
payment shall be due in advance on the first day of each calendar month at the following address 3496 Fairview Way, West Linn,
OR 97068, or at such other place designated by written notice from Sublessor.


 


*Additional
NNN Rent: Property and personal property taxes, building casualty and personal property insurance, and wastewater taxes are due
each month as additional rent to Sublessor.


 






    	 



    	 



    

 





Late
Charges:


 


Any
rent payment not made by the fifth day of the month shall be considered overdue and in addition to Sublessor's other remedies,
Sublessor may levy a late payment charge equal to five percent (5%) per month on any overdue amount.


 


Rent
Payments and Security Deposit:


 


Prior
to taking possession of the Premises, Sublessee shall pay first month's rent, the last two months' rent, and a one month security
deposit in the amount of $100,000 (One Hundred Thousand Dollars) for the full and faithful performance by the Sublessee of all
the terms of this Commercial Sublease. The security deposit will be refunded to Sublessee after the expiration of this sublease,
provided the Sublessee has fully and faithfully carried out all of its obligations under this Agreement.


 


Sublessor
agrees to notify Sublessee in writing on any notices received by Sublessor from landlord, including but not limited to a breach
of Master Lease. Sublessor agrees that Sublessee has the right to cure said breach, and offset the cost of said cure from payments
due Sublessor.




Utilities:


 


Sublessee
shall pay directly for all utilities, services and charges provided to the premises, including any and all deposits required.


 


Parking
Space:


 


Sublessee
is assigned parking as follows: all on Property 


 


Use:


 


If
consistent with City of Denver zoning requirements, Sublessee shall use the premises for licensed medical/retail marijuana sales,
and for no other purpose without Sublessor's prior written consent. Notwithstanding the forgoing, Sublessee shall not use the
Premises for the purposes of storing, manufacturing or selling any explosives, flammables or other inherently dangerous substance,
chemical, thing or device.


 


Quiet
Enjoyment:


 


Sublessor
covenants and warrants that upon performance by Sublessee of its obligations hereunder, Sublessor will keep and maintain Lessee
in exclusive, quiet, peaceable and undisturbed and uninterrupted possession of the Premises during the term of this sublease.


 



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Repairs:


 


Sublessee
shall at its own expenses make all necessary repairs to the Premises. Such repairs shall include routine repairs of floors, walls,
ceilings, and other parts of the Premises damaged or worn through normal occupancy, except for major mechanical systems or the
roof, subject to the obligations of the parties otherwise set forth in this Sublease.


 


Default
and Termination:


 


The
occurrence of any one or more of the following events shall constitute a default and breach of this Sublease by Sublessee:


 


		A.	Sublessee
                                         failing to pay Base Rent or Additional Rent within Ten (10) days of its due date;



		B.	Sublessee
                                         failing to make any other payments required to be made by Sublessee when due, where such
                                         failure shall continue for a period of seven (7) calendar days following notice from
                                         Sublessor to Sublessee;



		C.	Sublessee
                                         failing to perform or keep any of the other terms, covenants and conditions herein contained
                                         for which it is responsible, and such failure continuing and not being cured for a period
                                         of thirty (30) calendar days after notice from Sublessor or if such default is a default
                                         which cannot be cured within a 30 calendar day period, then Sublessee's failing to commence
                                         to correct the same within said 30 calendar day period and thereafter failing to prosecute
                                         the same to completion with reasonable diligence; If the default occurs due to order
                                         or citation by the governing authority having jurisdiction over the premises, whether
                                         such default or order is issued to the Sublessor or to the Sublessee, the time for cure
                                         shall conform to the time granted by such governing authority, including any time granted
                                         by any tribunal.



		D.	Sublessee
                                         being adjudicated as bankrupt or insolvent or filing in any court a petition in bankruptcy
                                         or for reorganization or for the adoption of an arrangement under the Bankruptcy Act
                                         (as now or in the future amended) or the filing of an involuntary bankruptcy against
                                         Sublessee unless said involuntary bankruptcy is terminated within thirty (30) calendar
                                         days from the date of said filing, or Sublessee filing in any court for the appointment
                                         of a receiver or trustee of all or a portion of Sublessee's property or there being appointed
                                         a receiver or trustee for all or a portion of Sublessee's property, unless said receiver
                                         or trustee is terminated within thirty (30) calendar days from the date of said appointment;
                                         Sublessee making any general assignment or general arrangement of its property for the
                                         benefit of its creditors.



		E.	If
                                         there is a breach or default of any provision of the Revolving Line of Credit Promissory
                                         Note or the Licensing Agreement, this sublease shall be in default.



 


In
the event of an occurrence of default as set forth above and not being cured for a period of thirty (30) calendar days after notice
from Sublessor, Sublessor shall have the right to terminate this Sublease and end the term hereof by giving to Sublessee written
notice of such termination. re-enter
and take possession of the Premises or any part thereof and repossess the Premises. In the event of a termination of lease as
a result of default, Sublessee shall pay to Sublessor damages including repossession costs, brokerage commissions, legal expenses,
attorneys' fees, expenses of employees, alteration costs and expenses of preparation of such re letting. Any Late Payment shall
bear a penalty of $200.00.


 






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Upon
the expiration or earlier termination of this Agreement, Sublessee shall return the Premises to Sublessor in good repair, condition
and working order, ordinary wear and tear resulting from proper use thereof alone excepted.


 


Indemnity:


 


Sublessee
shall indemnify Sublessor against, and hold Sublessor harmless from, any and all claims, actions, suits, proceedings, costs, expenses,
damages and liabilities, including reasonable attorney's fees and costs, arising out of, connected with, or resulting from Sublessee's
use of the Premises, including without limitation the manufacture, selection, delivery, possession, use, operation, or return
of the Premises.


 


Assignment
and Subletting:


 


The
Sublessor hereby authorizes and consents for the Premises to be sublet by Sublessee DPCO Denver, LLC, DPCO Jason, LLC, DPCO Brighton,
LLC and/or DPCO Colfax, LLC (the "Third Sublessee"); however Sublessee shall remain responsible for all terms and conditions
of this Sublease. Third Sublessees must meet all other requirements of this Sublease and shall be liable for all conditions, covenants
and agreements in the Master Lease.


 


Sublessee
does not have the right to sublet premises to any other party, other than stated above.


 


The
Sublessee acknowledges it must be licensed by both the City of Denver's Department of Excise & Licenses, and the State of
Colorado's Marijuana Enforcement Division. Sublessee must keep said licenses current and remain in good standing. In the event
Sublessee receives disciplinary or violation notice, said notice must be submitted to Sublessor within 3 days of receipt. Should
Sublessee receive notice from City of Denver's Department of Excise or State of Colorado's Marijuana Enforcement Division, requiring
operations to cease, Sublessee will cease operations immediately, or Sublessee will be in default of Sublease.


 


Best
Business Practices:


 


Sublessee
acknowledges that it must adhere to the following standards for compliance and cultivation:


 



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Compliance:


 


The
Sublessee must at all times comply with the following guidelines, failure to do so will be considered a default under the terms
and conditions of this Sublease.


 


		●	Preventing
                                         the distribution of marijuana to minors;



		●	Preventing
                                         revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;



		●	Preventing
                                         the diversion of marijuana from states where it is legal under state law in some form
                                         to other states;



		●	Preventing
                                         state-authorized marijuana activity from being used as a cover or pretext for the trafficking
                                         of other illegal drugs or other illegal activity;



		●	Preventing
                                         violence and the use of firearms in the cultivation and distribution of marijuana;



		●	Preventing
                                         drugged driving and the exacerbation of other adverse public health consequences associated
                                         with marijuana use;



		●	Preventing
                                         the growing of marijuana on public lands and the attendant public safety and environmental
                                         dangers posed by marijuana production on public lands; and



		●	Preventing
                                         marijuana possession or use on federal property.



 


The
Sublessee must provide proof of the following information to Sublessor.


 


		●	Business
                                         is duly licensed and registered with the State.



		●	Provide
                                         application (and related documentation) submitted by the business for obtaining a state
                                         license to operate its marijuana-related business.



		●	Description
                                         of the activity for the business, including the types of products to be sold and the
                                         type of customers to be served (e.g., medical versus recreational customers)



		●	The
                                         business, its owner(s), manager(s), or other related parties are not, or have not been,
                                         subject to an enforcement action by the state or local authorities responsible for administering
                                         or enforcing marijuana-related laws or regulations.



		●	The
                                         owner(s) or manager(s) of a marijuana-related business reside in the state in which the
                                         business is located.



 


Ventilation
and Odor Control:


 


		●	The
                                         pungent odor from marijuana cultivation operations is objectionable to many people. Offensive
                                         odors can easily migrate in and around the marijuana cultivation site and some strains
                                         produce odors that are detectable in the surrounding neighborhood as well as adjacent
                                         tenants.



		●	It
                                         is imperative to properly design the ventilation system, taking into consideration the
                                         square footage and number of plants. A properly sized, installed and maintained ventilation
                                         system can help resolve two issues. Firstly, having the grow rooms properly balanced
                                         will inhibit odors from escaping. Secondly, the addition of a dehumidifying system to
                                         control mold and pathogen growth should be considered. Ideally, humidity to control molds
                                         should be set under 50%. Contact a reputable HVAC contractor for assistance with these
                                         design elements.



 






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		●	Three
                                         (3) odor control technologies have shown promise with controlling odors from grow operations.



 


Activated
Carbon Filtration - This technique involves forcing the air circulating within the HVAC system through an activated carbon
filter in order to filter out odors and pathogens that may pose a public health risk. This method is highly effective and can
be used in combination with other technologies such as an electrostatic precipitator.


 


		●	The
                                         size and layout of the cultivation operation will determine the requirements for the
                                         carbon filtration system. Larger scale operations will require the use of larger fans
                                         and more carbon and will typically increase the requirements of existing HVAC systems.
                                         In addition, as filters age and the activated carbon becomes clogged with impurities,
                                         it will be necessary to replace the carbon; filters should typically be replaced per
                                         the manufacturers recommendation. In addition, the dust collector "sock" associated
                                         with the carbon filter should be changed out every 6-8 months for proper air flow.



		●	Carbon
                                         filtration is the least energy intensive of the three technologies. In most cases, the
                                         energy required to run the filtration system is already accounted for in the air handling
                                         and exchange system. The excess energy necessary to force air through the filter is negligible
                                         and, depending on the size of the discharge and intake, often only slightly alters the
                                         speed of the exchange. The use and disposal of the filters creates the most physical
                                         waste; however, the carbon can typically be regenerated for reuse.



 


Negative
Ion Generation - These machines, sometimes called electrostatic precipitators, will use a negative charge to attract positively
charged particles in the air. The charged particles are attracted to the metal filters, which over time, will become concentrated
with particles and require cleaning with water on a regular basis. In some cases this technology has been shown to work.


 


		●	The
                                         negative ion generators can improve indoor air quality to a greater degree than some
                                         of the other technologies. The environmental impact of this technology is also dependent
                                         upon size and use. They are typically powered by a single wall outlet and can run 24
                                         hours a day, 7 days a week. They will also need to be cleaned which usually requires
                                         removing the metal panel and washing it to remove the particles. Otherwise, they require
                                         very little maintenance and their energy consumption is typically negligible and lower
                                         than many fans.



 






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Ozone
Generators - Ozone can be extremely effective at breaking down odors and other contaminants. Potential problems with ozone
originate with the molecule's destructive tendencies. Ozone is an effective sterilizer; however, excessive and/or unmonitored
use has been shown to damage or even destroy crops and can cause lung irritation.


 


		●	Although
                                         ozone degrades quickly, the output of the gas can be an indoor environmental hazard to
                                         both the people and the plants. Release of the gas outside can also have varying local
                                         effects depending on the time of day, concentration, and disbursement factors associated
                                         with the location and weather. The major impact will come from energy consumption.



 


Masking
Agents - There are also odor masking equipment that can be used for temporary localized odor control. This method is not recommended
to control odors alone.


 


		●	A
                                         preventative maintenance and replacement plan should be established for any of theses
                                         systems to ensure optimum operation and continuous odor control.



 


Energy
Consumption


 


		●	Energy
                                         efficient lighting such as compact fluorescent lights (CFLs), may be a great alternative
                                         to incandescent bulbs in many applications; however, they may not provide the proper
                                         growing spectrum for your plants. High efficiency CFLs or LEDs should be used whenever
                                         possible in non-grow spaces, such as offices and restrooms. In addition, when installing
                                         new electrical equipment, use products with the Energy Star seal whenever feasible. Always
                                         have a licensed electrical contractor install electrical equipment and lighting to ensure
                                         safe wiring and adherence to local building code requirements.



		●	Another
                                         option to off-set your energy usage is to purchase Windsource from Xcel Energy or carbon
                                         off-sets through Climate Trust or The Carbon Fund.



 


Water
Quality and Conservation


 


		●	Although
                                         water covers nearly three quarters of the earth, less than one percent is clean fresh
                                         water. Therefore, it is critical that we conserve and protect this valuable resource.
                                         Never dispose of anything in the outside storm drains. Keep areas surrounding dumpsters
                                         free of debris and wastes. Remember, "nothing in the storm drain but stormwater".
                                         To help with water conservation, educate staff on turning off the water while washing
                                         hands and equipment, installing low-flow aerators on faucets, and retrofitting toilets
                                         to low flow models.



 






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Other
Standard Practices


 


		●	Ensure
                                         safe disposal of fertilizers, insecticides, plant growth regulators, and other chemicals.
                                         Buy only what you need and store in a safe place and clean- up spills immediately. Refer
                                         to the Material Safety Data Sheet for disposal requirements.



		●	Currently
                                         there are no pesticide products that are registered or labeled for use on medical marijuana.
                                         The application of a pesticide to a plant that is not on the pesticide label is a violation
                                         of federal and state pesticide laws.



		●	Effective
                                         July 1, 2011, section 12-43.3-12.200 of the of the Colorado Revised Statute in part requires
                                         that medical marijuana waste must be rendered unusable prior to leaving the facility
                                         by grinding and incorporating the material with non-consumable solid wastes such as food
                                         waste, soil or other compostable materials. Composting unusable plant material and soils
                                         provides a valuable opportunity to create nutrient rich soil to stimulate healthy plant
                                         growth. MMJ Regulation.pdf



		●	Provide
                                         shower facilities to employees to use before and after work to reduce the introduction
                                         of potentially harmful molds, mildew and bacteria to the plants, workers and their families.



 


Severability:


 


If
any part or parts of this Agreement shall be held unenforceable for any reason, the remainder of this Agreement shall continue
in full force and effect. If any provision of this agreement is deemed invalid or unenforceable by any court of competent jurisdiction,
and if limiting such provision would make the provision valid, then such provision shall be deemed to be construed as so limited.


 


Entire
Agreement:


 


This
Agreement constitutes the entire agreement between the parties and supersedes any prior understanding or representation of any
kind preceding the date of this Agreement. There are no other promises, conditions, understandings or other agreements, whether
oral or written, relating to the subject matter of this Agreement. This Agreement may be modified in writing and must be signed
by both parties.


 


Governing
Law:


 


This
Agreement shall be governed by and construed in accordance with the laws of the state of Colorado.


 



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Notices:


 


Any
Notice and other communications which either party desires to give the other, may be given either personally or by post through
certified mail, to the following address:


 


	Sublessor:	 	Sublessee:
	Diego
    Pellicer Worldwide Inc.	 	DPCO,
    Inc
	3946
    Fairview Way	 	1
    S Harrison Street
	West
    Linn, OR 97068	 	Denver,
    CO 80209




 


Waiver:


 


The
failure of either party to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of that party's
right to subsequently enforce and compel strict compliance with every provision of this Agreement. The acceptance of rent by Sublessor
does not waive Sublessor's right to enforce any provisions of this Agreement.


 


If
Colorado or Denver laws or regulations, or Federal notices or prosecution, prohibit a Subtenant's operation of a marijuana operation
at this location during the term of this Sublease or if a governmental notice is delivered to Landlord, Sublessor or Sublessee
which requires the cessation of marijuana cultivation or infusion on the Premises, Landlord, Sublessor or Sublessee may terminate
this Sublease with no penalties and Sublessee shall vacate the Premises within 30 days, if it cannot be cured, and any deposits
and prepaid rent shall forthwith be returned by Sublessor to Sublessee.


 


If
Premises' location or subtenant's subleases, licenses or operations is not approved, issued and/or licensed by the Marijuana Enforcement
Division, City of Denver Zoning and/or City of Denver Excise and License Department, Sublessee may terminate this Sublease and
this Sublease will become null and void without penalty, any deposits, prepaid rent payments shall forthwith be returned by Sublessor
to Sublessee. Any rents already paid will be retained by Sublessor.


 


This
Sublease may be executed in counterparts, all of which shall collectively be considered the original. A facsimile signature shall
be sufficient and shall constitute an original signature for all purposes.


 



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IN
WITNESS WHEREOF, the parties hereto have executed this Consent as of the day and year first written above.


 


AGREED
TO this 15 day of August, in 2014, by:


 





	Sublessor:	 	Sublessee:
	Diego
    Pellicer Worldwide Inc.	 	DPCO,
    Inc



 





	/s/
    Ronald Throgmartin	 	/s/
    Neil Demers	 
	Ronald
    Throgmartin	 	Neil
    Demers	 


 


 


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