Exhibit
10.14


 


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 Lessor (M&S, LLC) for a
period starting from August 14th, 2014 and ending on June 30, 2018 (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 755 South Jason Street, Denver, Colorado,
80223 and described as a +/- 15,000 square foot warehouse-type structure, (the "Premises").




 


Term:


 


The
term of this Commercial sublease shall commence on the 14th day of August, 2014 and shall continue until the 30th of June, 2018.


 


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 $32,875 per month. 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
Rent: Property and personal property taxes, building casualty and persona] 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 two month security
deposit in the amount of $164,375 (One Hundred Sixty Four Thousand Three Hundred and Seventy Five 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 growing,
medical/retail processing (MIPS) and medical/retail center purposes only, 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.


 






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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.
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.


 


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.


 






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Best
Business Practices:


 


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


 


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




 






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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 12-43.342.200 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 lnc.	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 15th 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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