Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 13, 2015

DIEGO PELLICER WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware		333-189731		33-1223037
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

6800 Owensmouth Avenue, Suite 350, Los Angeles, CA 91303

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (818) 703-8300

P.O. Box 11383

Washington, DC 20008

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Current Report on form 8-K (this “Report”) contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “seeks,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” below. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Such statements may include, but are not limited to, information related to: anticipated operating results; relationships with our customers; consumer demand; financial resources and condition; changes in revenues; cost of sales; selling, general and administrative expenses; interest expense; legal proceedings and claims.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this Report. You should read this Report and the documents that we reference and filed as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Item 1.01

Entry Into A Material Definitive Agreement

Merger and Share Exchange Agreement

On March 13, 2015 (the “Closing Date”), Diego Pellicer Worldwide, Inc. (f/k/a Type 1 Media, Inc.) (the “Company” or “PubCo”) closed on a merger and share exchange agreement (the “Merger Agreement”) by and among (i) the Company, and (ii) Diego Pellicer World-wide 1, Inc., a Delaware corporation, (“Diego”), and (iii) Jonathan White, the majority shareholder of the Company (the “Majority Shareholder”). Pursuant to the terms of the Merger Agreement, Diego shall be merged with and into the Company, with the Company to continue as the surviving corporation (the “Surviving Corporation”) in the Merger, and the Company succeeding to and assuming all the rights, assets, liabilities, debts, and obligations of Diego (the “Merger”).

In connection with the closing of the Merger, on the Closing Date, Jonathan White and Thomas Baxter submitted to the Company a resignation letter pursuant to which they resigned from their positions as officers and members of the Board of Directors of the Company. Messrs. White and Baxter’s resignations were not a result of any disagreements relating to the Company’s operations, policies or practices. On the Closing Date, the board of directors of the Company (the “Board”) and the majority stockholders of the Company (the “Shareholders”) accepted the resignations of Messrs. White and Baxter and, contemporaneously appointed: (i) Philip Gay to serve as the Chief Executive Officer and member of the Board of Directors, (ii) Ron Throgmartin to act as Chief Operating Officer, (iii) Nick Roberts to act as Chief Financial Officer; and (iv) Alan Valdes, Douglas Anderson, and Stephen Norris to serve as members of the Board of Directors.

In anticipation of the Merger, the Company changed its name from “Type 1 Media, Inc.” to “Diego Pellicer Worldwide, Inc.” on February 26, 2015.

The foregoing descriptions of the terms of the Merger Agreement are qualified in its entirety by reference to the provisions of the Exchange Agreement filed as Exhibit 2.1 to this Report, which is incorporated by reference herein.

Cancellation Agreement

In connection with the Merger, the Company entered into a cancellation agreement with the Majority Shareholder (the “Cancellation Agreement”) whereby the Majority Shareholder, owning an aggregate of 55,000,000 (post-split) shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) agreed to cancel the 55,000,000 shares of Common Stock, in exchange for $169,000.

The foregoing descriptions of the terms of the Cancellation Agreement are qualified in its entirety by reference to the provisions of the Cancellation Agreement filed as Exhibit 10.6 to this Report, which is incorporated by reference herein.

Item 2.01

Completion Of Acquisition Or Disposition Of Assets

Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.

On March 13, 2015, we acquired Diego pursuant to the Merger Agreement. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

FORM 10 DISCLOSURE

As disclosed elsewhere in this Report, on March 13, 2015, the Company acquired Diego in a merger transaction. Item 2.01(f) of Form 8-K provides that if the registrant was a shell company, other than a business combination related shell company, as those terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”), immediately before the reverse acquisition transaction, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10 under the Exchange Act reflecting all classes of the registrant’s securities subject to the reporting requirements of Section 13 of the such Exchange Act upon consummation of the transaction.

Although we were not a shell company at any point before the reverse acquisition transaction disclosed under Item 2.01, we are providing below the information that we would be required to disclose on Form 10 under the Exchange Act if we were to file such form. Please note that the information provided below relates to the combined enterprises after the acquisition of Diego, except that information relating to periods prior to the date of the reverse acquisition only relate to Diego unless otherwise specifically indicated. Diego World-wide 1, Inc. is referred to in this section collectively as “we,” “us” the “Company” and “Diego” unless the context indicates otherwise.

Information in response to this Item 2.01 below is keyed to the items numbers of Form 10.

Item 1.

Description Of Business

Business Overview

Diego is a real estate and a consumer retail development company that is focused on developing “Diego Pellicer” as the world’s first “premium” marijuana brand by adhering to the highest quality and standards for its facilities along with both cannabis and non-cannabis products. The Company’s initial focus is to acquire and develop legally compliant real estate locations for the purposes of leasing them to state licensed companies in the cannabis industry. Diego does not grow or sell marijuana or marijuana infused products in the early stages of this plan.

Diego’s initial revenues derive from leasing real estate and selling non-cannabis related products; however, when it is federally legal to do so, Diego will be properly positioned to take advantage of pre-negotiated acquisition contracts with selected Diego tenants in marijuana retail and production facilities throughout the country. Diego’s proprietary model will allow it to become a nationally branded marijuana retailer and producer, instantaneously, with the change of federal law. The company is in the process of drafting these pre-negotiated acquisition contracts at this time.

To operate within the constraints set forth by the US government, the purpose of this business plan is to describe Diego; however, to describe the successes of Diego Pellicer branding, this business plan will contain operational and financial highlights of grow and retail operations with which Diego has pre-negotiated acquisition contracts. These external operations are presented as DP Grow and DP Retail, and the results of these operations as presented will not directly benefit Diego until after Federal legalization.

Our Corporate History and Background

Diego Pellicer Inc. was formed in the state of Washington of December 5, 2012, with the intent to produce and sell cannabis in the state of Washington. The Company determined that in order to be successful and avoid any potential violation of federal law, it would form a new corporation that would not produce or sell cannabis directly. Therefore, Diego Pellicer Worldwide, Inc. was formed as a Delaware corporation, on August 26, 2013. The Company was developed to position itself in such a way that if the cannabis industry were to federally legalize, then it would be in an advantageous position to quickly become one of the first luxury integrated brands in the industry. Currently, the Company’s focus is to acquire and develop legally compliant real estate locations for the purposes of leasing them to state licensed companies in the cannabis industry. Diego does not grow or sell marijuana or marijuana infused products at this time.

Mission

Diego will fuse the stringent quality standards of the brand, with award-winning legal growers and retailers, throughout the country, where recreational and/or medical marijuana sales and cultivation are permitted by State law. As a tenant of Diego, these operators will have access to Diego’s world class management team with expertise in real estate, retail management, agriculture and USDA experts, legal, marketing and branding, product development and creative teams.

Diego’s mission is to globally dominate the marijuana marketplace, when the US and countries around the world, legalize commerce of marijuana on a national and international platform. Diego will accomplish this by positioning the Company, through its proprietary business model, to be the first fully integrated marijuana retail operation and premium brand, known for its beautifully designed user friendly retail stores offering the finest quality products at competitive prices, when the US and other countries legalize the sale of marijuana.

Philosophy

We believe that legalizing marijuana, regulating it and taxing it, will cause less harm and do more good than the prohibition environment. We believe marijuana should be elevated to its proper place among other legal recreational intoxicants such as fine wines, liquors, beers, cigars, etc. There is an overwhelming amount of scientific evidence that supports our philosophy, as well as a growing number of supporters ranging from high-ranking US and foreign politicians to prominent figures in the entertainment industry. In addition, we believe that legalization will help unlock the phenomenal power of cannabis as a medicinal treatment for numerous ailments from headaches to cancer.

Brand History

Diego Pellicer was a Spanish colonial vice governor of Cebu, a major island in the Philippine archipelago. He grew to become the largest grower of hemp in the world and is our name sake. He serves as an inspiration to our executive team, as well as distinctive brand befitting the quality of Diego Pellicer Worldwide.

Vision

Our vision is to continue to develop Diego Pellicer as a premium brand that is valued and positioned to appeal to a broad customer base. Management feels a good analogy for the perception of our brand is that Diego Pellicer is to marijuana what Davidoff is to cigars, Godiva to chocolate and Starbucks to coffee.

In addition, Diego believes that in the very near future, the US and other countries will embrace the will of the people, and legalize the responsible adult use of marijuana. Legalizing national and international commerce of marijuana, will allow Diego to take its brand and unmatched quality standards to markets all around the globe.

Value Proposition

The initial value proposition of Diego consists of a standardized approach to the build-outs of real estate holdings, customized for premium marijuana grow and retail operations. The build-out model is optimized to maximize resources while minimizing costs and overhead. With each build-out, Diego pre-negotiates acquisition contractions with licensed DP Grow and DP Retail tenants, which, upon changes to federal law, introduces our second value proposition—ownership of operations from seed to sale in an industry that is projected to exceed $8 billion by 2018 and we hope will soon rival that of traditional markets such as tobacco and alcohol.

Market Size

The US state-sanctioned medical marijuana market generated a total revenue of $1.6 billion in 2013, an estimated increase of 33% over 2012, exceeding industry estimates by more than $100M. By comparison, the marijuana market is less than 2% of the US tobacco market, a $153.5 billion market that has no medicinal value, and less than 1% of the alcohol market, which valued at $197.8 billion in 2012 (Ginley, 2013; MarketLine, 2013). As states legalize marijuana, and international markets develop, the emerging legalized marijuana industry will begin to rival that of tobacco and alcohol.

Target Geographies

Diego has entered a rapid growth and expansion stage in its evolution toward becoming an internationally recognized brand. The target geographies for Diego are all US states in which recreational or medicinal marijuana is legalized. This is a phased implementation that carefully pre-stages funding and materials to be first to market, with a proprietary model, as each state rules on legalization. In certain scenarios, Diego may choose to allow weak competitors to fail, making available prime real estate that otherwise would be inaccessible.

Target Consumers

There are an estimated 1.3 million medical marijuana patients in the US and nearly 4,000 retailers. California has the largest number of marijuana patients at more than 500,000, followed by Michigan at 344,000 and Colorado with 109,000. Washington is a close 4th at 103,000 registered patients.

The demographics for consumers that have tried marijuana at least once, range between ages 18 to 49, with the greatest numbers between the ages 26 and 34. These consumers are predominantly male and college educated.

Alaska has the fastest growing population of potential consumers, followed by Washington DC, Colorado, New Mexico and Hawaii, with Washington just a few points below. In 2012, Montana, Colorado, California, and Washington had the greatest increase in disposable income, thus increasing the breadth of target consumers.

Material Agreements

On April 19, 2014, the Company entered into a commercial agreement and merger agreement with Diego Pellicer, Inc., a Washington corporation (“Diego Washington”). Diego Washington agreed to making a capital contribution from its current investors of not less than $350,000 in the Company and that the Company agreed to offer to the holders of Series A Preferred Stock of Diego Washington and to current holders of convertible promissory notes convertible for shares of Diego Washington, the right to exchange that same number of shares to shares the Company.

On September 19, 2014, the Company entered into a Lease Agreement with M-P Properties whereby the Company agreed to lease the property located at 2215 4^th Avenue, Seattle, Washington, for a term of five years with an option to renew. The Company agreed to pay $78,000 per year.

On March 1, 2014, the Company entered into a Sublease Agreement with Diego Pellicer, Inc., a Washington entity whereby the Company agreed to sublease the property located at 2215 4^th Avenue, Seattle, Washington, for a term of four years.

On June 12, 2014, the Company entered into a Lease Agreement with Shamira, LLC whereby the Company agreed to lease the property located at 4242 Elizabeth Street, Denver, Colorado, for five years with an option to renew. The Company agreed to pay $360,000 per year for the first year of the agreement, with an increase of 3% for year subsequent year.

On August 14, 2014, the Company entered into a Commercial Sublease Agreement with DPCO, Inc., a Colorado corporation, whereby the Company subleased the property located at 4242 Elizabeth Street, Denver, Colorado for a term of five years.

On July 14, 2014, the Company entered into a Lease Agreement with 2949 W. Alameda Ave LLC whereby the Company agreed to lease the property located at 2949 W. Alameda Avenue, Denver, Colorado, for five years with an option to renew. The Company agreed to pay $20,000 per month in rent.

On August 14, 2014, the Company entered into a Sublease Agreement with DPCO, Inc., a Colorado corporation, whereby the Company agreed to sublease the property located at 2949 W. Alameda Avenue, Denver Colorado for a year of five years.

On August 13, 2014, the Company entered into a Sublease Agreement with MandS LLC whereby the Company agreed to lease the property located at 755 South Jason Street, Denver, Colorado, for four years. The Company agreed to pay $25,000 per month in rent.

On August 14, 2014, the Company entered into a Sublease Agreement with DPCO, Inc. a Colorado corporation, whereby the Company subleased the property located at 755 South Jason Street, Denver, Colorado for a term of four years.

On September 15, 2014, the Company entered into a Lease Agreement with Oakway Golf Course, Inc. whereby the Company agreed to lease the property located at 800 North 42^nd Street, Springfield, Oregon, for five years with an option to renew. The Company agreed to pay $7,227 for the first year of the lease, with a $150 increase in each subsequent year.

Our Industry

We are in a burgeoning industry, centered on the production and sales of medical and recreational marijuana. Diego Pellicer is focused on providing legally compliant retail andand production facilities to State licensed operators. In addition, Diego Pellicer offers branding opportunities to state licensed producers and retailers that meet our stringent qualifications.

In addition to providing fully branded and built real estate to qualified tenants, Diego Pellicer offers non-cannabis infused products, apparel, and other tangible products at a wholesale rate. To become a qualified tenant, Diego requires its tenants to strictly adhere to testing and labeling requirements along with all state laws and federal guidelines to assure quality and consistency of marijuana products, ensuring safe sale and consumption. Table 7 provides a list of our current property portfolio.

Our Business Strategy

Market Definition and Roles

The marijuana market consists of medical and recreational regulators, producers, testers, processors, wholesalers, retailers, collectives, consumers and real estate holders. Since data pertaining to specific aspects of marijuana sales, such as processor revenues, is virtually non-existent for the marijuana market, the market is valued according to retail sales data provided by state and federal governing bodies. Below is a brief summary of each role:

	●	Regulators: State and federal lawmakers.
	●	Producer or Grower: Cash crop farmers and grow shops.
	●	Tester: Testers of marijuana for quality and other required measures.
	●	Processor or Infuser: Processers of marijuana into a commercial product (flower, concentrates, and edibles).
	●	Wholesaler: Buyers from producers or processors that sell in bulk to other processers and retailers.
	●	Retailer: For profit (proprietorship, partnerships, or for-profit business) sellers to consumers and patients.
	●	Collective or Cooperative: Non-profit organizations selling mostly to patients.
	●	Recreational Consumers or Patients (local and marijuana tourist): Consumers of marijuana products, recreationally or by medical prescription.
	●	Real Estate Holdings: Companies that specialize in building-out and managing real estate for all aspects of operations (e.g., grow, retail, processing and packaging, etc.)

Market Strategy

Our short-term strategy is to profit only from the lease payments of our real estate holdings and from the sale of branded, non-cannabis products. Diego has pre-negotiated acquisition contracts with selected tenants that trigger only when it is legal, or not illegal, to conduct interstate commerce in marijuana.

The three pillars of our strategy are:

	1.	Acquire compliant properties legally, and build-out high-quality marijuana grow and retail locations, and lease these locations to tenants that are stand-alone, independent corporations with the ability to meet Diego Pellicer quality and branding standards
	2.	While initially Diego does not have an ownership stake in grow or retail companies, our strategy is to execute pre-negotiated acquisition contracts with its tenants whereby Diego has the exclusive option to acquire these independent operator lessees. These options shall only be executed when and if the company deems it sufficiently legal to do so and there is no guarantee these options will be exercised.
	3.	Develop and sell quality non-cannabis ancillary products including apparel, luxury merchandise products, non-cannabis chocolates and pastries, just to name a few. These products will be sold in DP retail outlets where allowed or in proximate independent stores and through e-commerce.

A very important aspect of our marketing plan is to build Diego Pellicer as a luxury brand. This not only enables us to establish further and exploit Diego Pellicer as a premium brand, but also to generate significant revenues off of non-cannabis products.

For the consumer, both the retail stores and e-commerce platform offers an informative and personalized way to shop and purchase products anywhere, at any time and from any device. Diego Pellicer enhances the shopping experience by providing a fun and easy to use e-commerce that delivers product and content from brand influencers that will help inform, personalize and curate products specific to the consumers’ needs and desires.

Market Size

The US marijuana market has experienced rapid, chaotic growth in recent years, which is set to continue beyond the forecast target of 2019 due primarily to regulatory misalignment between state and federal governments.

The marijuana secondary and tertiary markets have not yet been analyzed as sources of revenue; however, emerging secondary markets such as marijuana tourism could become a significant source of income for recreational legal states. As a point of comparison, Holland earns $48.55 billion per year in tourist dollars. Of the 10 million tourists, 5.5 million or 55% of tourists visit bars and cafes, generating a total of nearly $27 billion and 220,000 jobs (NBTC, 2009). This equals roughly 30% of all business revenue generated in Washington state in 2012 (Washington State Department of Revenue, 2014).

Marijuana has become a major issue in state elections as voters are seeking politicians that support legalization (Gutwillig, 2014). As states legalize marijuana, and international markets develop, the emerging legalized marijuana industry will begin to rival that of tobacco and alcohol. Table 1 summarizes revenues generated by marijuana retail sales based on a number of sources, including state marijuana program reports.

Table 1: US Marijuana Retail Sales, 2013

	State	2013
	Alaska	$165,056
	Arizona	$304,000,000
	California	$760,000,000
	Colorado	$318,300,000
	Connecticut	$-
	DC	$2,000,000
	Delaware	$-
	Hawaii	$2,251,287
	Illinois	$-
	Maine	$3,453,515
	Massachusetts	$3,983,570
	Michigan	$54,000,000
	Montana	$4,352,110
	Nevada	$5,597,050
	New Hampshire	$-
	New Jersey	$12,800,000
	New Mexico	$6,419,467
	Oregon	$130,800,000
	Rhode Island	$3,960,918
	Vermont	$1,126,400
	Washington	$561,000

Source: (Brown and Resnick, 2013; California Department of Public Health, 2014b; California State Board of Equalization, 2009; Colorado Office of Research and Analysis, 2013a, 2013b, 2013c, 2013d, 2013e, 2014; Illinois Cannabis Patients Association, 2010; Leal, 2014; Marijuana Business Daily, 2013)

Figure 2 illustrates the market structure by state and retail sales revenues. Of the 21 states in which marijuana is legal, California generated the most revenue at $760M, followed by California was Colorado at $318M and Arizona at $304M. Most States operating in 2012 experienced double and triple digit growth into 2013, with the exception to California, which has leveled out from 2011 to 2013.

Figure 2: US Marijuana Retail Sales, 2013

Various industry reports estimate that marijuana sales could generate as much as $8.7 billion in state and federal taxes; however, data to support that estimate is not yet available.

Market Growth

The performance of the market is forecast to accelerate, with an anticipated growth of an average of 27% over the next four years to an expected market value greater than $8 billion by the end of 2018. Table 2 and Figure 3 provide estimated market growth from 2011 to 2018. This growth assumes that no additional states legalize. If additional states legalize, growth estimates will likely increase significantly.

Table 2: US Industry Estimates, 2013 to 2018

	2011	2012	2013	2014	2015	2016	2017	2018
Medicinal	1.5	1.2	1.6	1.9	2.3	2.9	3.5	4
Recreational				0.07	1.4	2	2.5	4.2
Total	1.5	1.2	1.6	1.97	3.7	4.9	6	8.2

Billions of Dollars, US

Source: (Brown and Resnick, 2013; California Department of Public Health, 2014b; CannaBusiness Media, 2014; Colorado Office of Research and Analysis, 2013a, 2013b, 2013d, 2013e, 2014; Fairchild, 2013a, 2013b; Galvin, 2013; Illinois Cannabis Patients Association, 2010; Leal, 2014; Marijuana Business Daily, 2013; Office of Financial Management, 2012)

Figure 3: US Industry Estimates, 2011 to 2018

Market Distribution

Market distribution must be measured indirectly with registered medical consumers and dispensaries. As expected, California has the largest number of marijuana patients at more than 500,000, followed by Michigan at 344,000 and Colorado with 109,000. Washington is a close 4th at 103,000 registered patients as listed in Table 3 and illustrated in Figure 4. There are currently an estimated 1.3 million medical marijuana patients in the US.

Table 3: Registered Medical Marijuana Patients

	State	Registered Patients
	Alaska	1,246
	Arizona	40,328
	California	553,684
	Colorado	109,622
	Connecticut	1,684
	DC	800
	Delaware	21
	Hawaii	11,695
	Illinois	0
	Maine	16,444
	Massachusetts	0
	Michigan	344,000
	Montana	30,000
	New Hampshire	1,600
	New Jersey	1,670
	New Mexico	9,760
	Nevada	5,162
	Oregon	60,516
	Rhode Island	5,941
	Vermont	846
	Washington	103,236
	Estimated Total Patients	1,298,255

Source: (Arizona Department of Health Services, 2013; Brown and Resnick, 2013; Burke, 2012; California Department of Public Health, 2014a; Department of Health Medicinal Marijuana Program, 2014; Division of Public and Behavioral Health Medical Marijuana Program, 2014; Gryczan, 2013; Marijuana Policy Project, 2013; Montana Department of Public Health and Human Services, 2012, 2013; Oregon Health Authority, 2014; Pierre, 2012; ProCon.org, 2012; Washington State Institute for Public Policy, 2014)

Figure 4: Registered Medical Marijuana Patients

Another indirect measure of market distribution is the number of medical marijuana dispensaries. Table 4 and Figure 5 provide the distribution of dispensaries across the US. The number of patients and dispensaries are mostly aligned; however, certain states such as Michigan have much higher ratio of patients to dispensaries than other states. This could be the result of inaccurate data.

Table 4: Registered Medical Marijuana Dispensaries

	State	Registered Dispensaries
	Alaska	0
	Arizona	98
	California	2,000
	Colorado	532
	Connecticut	27
	DC	4
	Delaware	1
	Hawaii	0
	Illinois	60
	Maine	8
	Massachusetts	35
	Michigan	215
	Montana	100
	New Hampshire	4
	New Jersey	6
	New Mexico	23
	Nevada	66
	Oregon	200
	Rhode Island	3
	Vermont	4
	Washington	334
	Estimated Total Dispensaries	3,720

Source: (Americans for Safe Access, 2011; Connecticut Department of Consumer Protection, 2014; FindTheBest.com, 2014; Noble, 2013)

Figure 5: Registered Medical Marijuana Dispensaries

Competitive Analysis and Benchmarking

Diego was one of the first to the market with a real estate holding and branding business model; however, other companies have since adopted similar strategies. Key differentiators between Diego and its competitors are superior branding, optimized build-out and turnkey grow and retail development, and, most importantly, pre-negotiated acquisition contracts. As with other marijuana-related financial data, collecting benchmark data on Diego competitors was especially challenging in that many of these companies fail to report or are unable to report the fundamentals of financial information. Table 5 provides a financial benchmark of Diego’s nearest competitors.

Table 5: 2013 Real Estate Holding and Branding Financial Benchmark—$000

	Market Cap		Rev		Cost of Rev		Gross Margin %			EBITDA Margin %			Net Profit
Medbox, Inc. (MDBX)	$	258,700	$	5,203	$	2,657		51.1	%		-14.8	%	$	(660	)
Advanced Cannabis Solutions, Inc. (CANN) Grey Market (3 Qtrs)	$	59,600	$	129	$	23		82.2	%		(542	%)	$	(1,277	)
Mountain High Acquisitions Corp. (MYHI) OTCQB	$	14,300		-				-			-		$	(1,336	)
Agritek Holdings, Inc. (AGTK)	$	8,410	$	79	$	86		7.6	%		(1189	%)	$	(1,453	)
Home Treasure Finders, Inc. (HMTF)(MJ real estate lessor)	$	4,160	$	203	$	0		INF			(44	%)	$	(92	)

Source: Finance.yahoo.com and CNBC.com

Tourism Effect

The secondary and tertiary effects of the marijuana market have received little attention by market analyst; however, markets such as marijuana tourism could become a significant source of revenue for recreationally legal states. For example, The Netherlands earns $48.55 billion per year in tourist dollars. Of the 10M tourists, 5.5 million or 55% visit marijuana bars and cafes, generating a total of nearly $27 billion and 220,000 jobs. Likewise, Colorado reported note that marijuana tourism is responsible for 90% of all retail sales in resort towns (Weissmann, 2014).

Peak Sales and Product Segmentation

Peak marijuana sales occur during two calendar periods: December/January and July/August. Smokable Marijuana sales exceed other product categories representing 87% of the market, which is followed by concentrates at 7% and edibles at 4% while drinks, topicals, accessories and clones generate the least amount of revenue at less than 1% each. The top marijuana product according to an analysis of a market leading dispensary is Bruce Banner followed by 303 Kush.

Legalization by State

Support for medical and recreational marijuana use has increased significantly over the past 20 years. According to a recent CNN poll, greater than 50% of the US population supports marijuana legalization. Figure 6 illustrates a select set of CNN poll results.

Figure 6: CNN/ORC Poll Results on Marijuana Use in the US

Two states, Colorado and Washington, have passed legislation for recreational marijuana. Several other states in which medical marijuana is currently legal will likely follow suite for reasons such as substantial tax revenues and a positive public support for legalization. States are learning from one another, refining legislation and establishing realistic tax strategies. The Obama administration has pledged to end Federal raids on state-sanctioned dispensaries (Furlow, 2012). Similar movements are occurring in other democratic countries such as Australia in which several states have decriminalized possession (Thies, 2012). Table 6 lists recreational and medicinal marijuana legalization status by state.

Table 6: State Recreational Marijuana Laws

State	Status/Year	Type of Legalization
Alaska	Decriminalized	Medical (Rec on Nov 2014 ballot)
Arizona	Passed (2010)	Medical
California	Decriminalized	Medical
Colorado	Passed (2012)	Medical and Recreational
Connecticut	Decriminalized	Medical
Delaware	Pending	Medical
Florida	Pending	Medical
Hawaii	Passed (2000)	Medical
Illinois	Passed (2013)	Medical
Maine (Portland only)	Decriminalized (2013)	Medical
Maryland	Decriminalized (2014)	Medical
Massachusetts	Decriminalized (2012)	Medical
Michigan	Passed	Medical
Minnesota	Passed (2014)	Medical
Mississippi	Pending	Pending
Montana	Pending	Medical
Nebraska	Pending	Pending
Nevada	Passed (2000)	Medical
New Hampshire	Passed (2013)	Medical
New Jersey	Passed (2010)	Medical
New Mexico	Passed (2007)	Medical
New York	Passed (2014)	Medical
North Carolina	Pending	Medical
Ohio	Decriminalized	Medical
Oregon	Decriminalized	Medical (Rec on Nov 2014 ballot)
Pennsylvania	Pending	Medical
Rhode Island	Decriminalized	Medical
Vermont	Decriminalized (2013)	Medical
Washington	Passed (2012)	Medical and Recreational
Washington DC	Decriminalized	Medical

Source: (California State Board of Equalization, 2009; Gacek, 2014; ProCon.org, 2014; U.S. Office of National Drug Control Policy, 2014)

Target Geographies

Diego has entered a rapid growth and expansion stage in its evolution toward becoming an internationally recognized brand. The target geographies for Diego are all US states in which recreational or medicinal marijuana is legalized. This is a phased implementation that carefully pre-stages funding and materials to be first to market, with our proprietary model, as each state rules on legalization. In certain scenarios, Diego may choose to allow weak competitors to fail, making available prime real estate that otherwise would be inaccessible.

Target Consumers

There are an estimated 1.3M medical marijuana patients in the US and nearly 4,000 retailers. California has the largest number of marijuana patients at more than 500,000, followed by Michigan at 344,000 and Colorado with 109,000. Washington is a close 4th at 103,000 registered patients.

Future Markets

Studies on marijuana use in The Netherlands have demonstrated that the availability of marijuana in café’s has had very little effect on increasing or decreasing marijuana use (MacCoun, 2011). As such, the next progression in the US market, following Federal legalization, is the establishment of café’s or other types of service centers for marijuana consumption. The number of café’s in The Netherlands has ranged between 700 and 800 over the past 15 years, and currently operates about 700 or 1 per 29,000 citizens, employing 4,000 workers and generating $832.2M annually (Monshouwer, Van Laar, and Vollebergh, 2011). Extrapolating this to the US market would indicate approximately 10,000 café’s and service centers where actual consumption of cannabis can take place.

Primary Service

Our primary service is fully branded and built real estate to qualified tenants. Our branding includes non-cannabis infused products, apparel, and other tangible products at a wholesale rate. To become a qualified tenant, Diego requires its tenants to strictly adhere to testing and labeling requirements along with all state laws and federal guidelines to assure quality and consistency of marijuana products, ensuring safe sale and consumption. Table 7 provides a list of our current property portfolio.

Table 7: Property Portfolio

Purpose	Size	City	State
Retail (recreational and medical)	3,300 sq.ft.	Denver	CO
Grow Warehouse	18,600 sq.ft.	Denver	CO
Grow Warehouse	14,800 sq.ft.	Denver	CO
Grow Warehouse	16,060 sq.ft.	Springfield	OR
Flagship recreational MJ store w/café and apparel	4,500 sq.ft.	Seattle	WA

Diego Pellicer creates a user friendly customer experience regardless of venue or form of media making it easy and safe for them to purchase. A major aspect of our marketing plan is to inform and educate consumers in a way that allows them to rely on DP as a trusted and valued brand. DP information and products will be available in all forms of media with a variety of different forms of content including videos, social media, online newsletters and blogs and TV.

	●	Consumers will find Diego on custom e-commerce websites and via online syndication at web portals, mobile and video destinations (Yahoo!, MSN, Google/YouTube, Hulu, Verizon, etc.) as a dedicated selling platform that will serve Diego created video as information and entertainment.
	●	Consumers will find our custom content via a cooperative syndication platform in which product partners leverage each other’s audiences for the distribution of their content and products.
	●	Through events in Diego stores and outlets
	●	Mass audiences could find Diego on network or cable television as the setting for a reality show or documentary series.
	●	Mobile marketing and Mobile apps

This will give our brand, products and content the flexibility and portability that consumers demand. This digital syndication strategy will be executed through a series of revenue sharing deals with partners through viral seeding strategies and via paid media through specific targeted websites and venues.

Revenue Generation and Growth

Diego generates current revenue and stages future revenue streams through the following processes:

	●	Acquire via lease or purchase, target properties to be improved for the growing, processing, distribution, and sale of medical and recreational marijuana, extracts and ancillary products.
	●	Sub-leases or leases these properties to state licensed operators.
	●	Capitalizes, where possible, on the build-out and leases near turnkey Retail, Processing and/or Growing facilities.
	●	Creates future merger agreements with those operators deem capable of carrying the Diego brand.
	●	Hold Merger Agreements with Diego and other favored partners that will trigger when marijuana commerce becomes legal (or not illegal) federally.
	●	Own DP Brands and other Intellectual Property (IP) in all places filed.
	●	Charge reasonable Market Net-Rents to the store owners/Operators to recover all build-out and start-up investment plus profit margin over the first lease term (generally five years.)
	●	Sell non-cannabis branded products lines such as apparel and edibles at wholesale to leased stores.
	●	Create an e-commerce platform selling non-cannabis branded merchandise
	●	Continue to build and market the brand utilizing all forms of media including traditional and digital media, social media, e-commerce, and strategic partners.

U.S. Federal Law

While marijuana is legal under the laws of several U.S. States (with vastly differing restrictions), at the present time, the concept of "medical marijuana" and "retail marijuana" do not exist under U.S. federal law. The United States Federal Controlled Substances Act classifies "marijuana" as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision.

The United States Supreme Court has ruled in a number of cases that the federal government does not violate the federal constitution by regulating and criminalizing cannabis, even for medical purposes. Therefore, federal law criminalizing the use of marijuana pre-empts state laws that legalizes its use for medicinal purposes.

In a memorandum dated August 29, 2013 addressed to "All United States Attorneys" from James M. Cole, Deputy Attorney General ("Cole Memo"), the U.S. Department of Justice acknowledged that certain U.S. States had enacted laws relating to the use of marijuana and outlined the U.S. federal government's enforcement priorities with respect to marijuana notwithstanding the fact that certain U.S. States have legalized or decriminalized the use, sale and manufacture of marijuana:

●

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 U.S. states where it is legal under state law in some form to other U.S. states;
	●	Preventing U.S. 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 U.S. federal property.

There is no guarantee that the current presidential administration will not change its stated policy regarding the low-priority enforcement of U.S. federal laws that conflict with state laws. Additionally, any new U.S. federal government administration that follows could change this policy and decide to enforce the U.S. federal laws vigorously. Any such change in the U.S. federal government's enforcement of current U.S. federal laws could cause adverse financial impact to the Company's business. See "Risk Factors.”

In February 2014, FinCEN issued guidelines allowing banks to legally provide financial services to Licensed Operators that hold a valid License ("FinCEN Memo"). The rules re-iterated the guidance provided by the Cole Memo, stating that banks can do business with Licensed Operators and "may not" be prosecuted. The guidelines provide that "it is possible [for the banks] to provide financial services" to Licensed Operators and while remaining in compliance with federal anti-money laundering laws. The guidance falls short of the explicit legal authorization that banking industry officials anticipated and the outcome of the banks relying on this guidance in transacting with Licensed Operators is currently unclear. See "Risk Factors.”

Employees

We presently have 5 full-time employees and 0 part-time employees. We consider our relationship with our employees to be excellent. We also had independent consultants under contract to provide financial management services, business development services, and sales management services. In addition to the diverse technical, intellectual property, legal, financial, marketing and business expertise of our professional team, from time to time we rely on advice from outside specialists to fulfill unique technology and other needs.

Item 1A.

Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this Report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our shares of common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Special Note Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this Report.

Risks Related to Our Business

The Company’s Growth and Operations are Subject to Regulatory Restrictions.

The regulations adopted in Washington and Colorado place restrictions on companies engaged in the recreational cannabis industry in those states. The Company may execute its business model of acquiring or leasing and improving real estate, and leasing or subleasing that real estate to recreational and medical cannabis companies in Washington, Colorado and other states where cannabis legal, but the current regulations in Washington and Colorado prohibit the Company from producing, processing, or selling recreational cannabis. The Company will not produce, process, or cell cannabis until and unless it is legal under Federal law.

The Company has received a subpoena from the United States Department of Justice.

The Company has received a subpoena from the United States Department of Justice, represented by the United States Attorney’s Office for the Western District of Washington, requesting the production of certain Company documents, records and banking records, including, but not limited to, those relating to Diego Pellicer, Inc., securities offerings, and potential investors of the Company. The Company believes that it has complied fully with all applicable laws, rules and regulations, and intends to cooperate fully with the government’s investigation. At this time, the Company is unable to determine the potential impact, if any, that will result from this investigation. If the Company, its officers or its directors are deemed to have taken unlawful action with respect to these matters, we may be subject to fines and other contractual and regulatory remedies, including being required to suspend or cease its operations. Such actions could have a material adverse effect on the conduct of our business, our financial condition or could result in the loss of your investment.

U.S. Federal Laws

The concepts of "medical marijuana and "retail marijuana" do not exist under U.S. federal law. The Federal Controlled Substances Act classifies "marijuana" as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in United States, and a lack of safety for the use of the drug under medical supervision. As such, marijuana-related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of marijuana are illegal under U.S. federal law. Strict compliance with state laws with respect to marijuana will neither absolve the Company of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company. While U.S. Department of Justice has instructed U.S. Attorneys that they need not expend resources with respect to entities selling marijuana pursuant to strict U.S. State licensing regimes, this directive can change, and U.S. Attorneys have discretion to interpret the Cole Memo as they see fit. Moreover, U.S. Attorneys have significant discretion with respect to the activities they seek to prosecute, regardless of any directive from the Department of Justice.

On December 9, 2014, Consolidated and Further Continuing Appropriations Act, 2015 ("Cromnibus Bill") was passed by the United States Senate approving the federal spending through to September 30, 2015. Sections 583 and 214 of the Cromnibus Bill protect medical marijuana laws in every state that has legalized it by prohibiting the U.S. Department of Justice from using federal funds to prosecute medical marijuana actors in states where their actions are legal. Nevertheless, there can be no certainty that future U.S. federal funding bills will include similar protection of medical marijuana laws.

Regulation that may hinder the Company's Ability to Establish and Maintain Bank Accounts

The U.S. federal law prohibitions on the sale of marijuana may result in the Company being restricted from accessing the U.S. banking system and they may be unable to deposit funds in federally insured and licensed banking institutions. While the Company does not anticipate dealing with banking restrictions directly relating to its business, banking restrictions could nevertheless be imposed due to the Company's banking institutions not accepting payments from Royalty Producers. Royalty Producers at times do not have deposit services and are at risk that any bank accounts they have could be closed at any time. Such risks increase costs to the Company. Additionally, similar risks are associated with large amounts of cash at these businesses. These businesses require heavy security with respect to holding and transport of cash, whether or not they have bank accounts.

The guidance provided in the FinCEN Memo may change depending on the incumbent U.S. government administration and is subject to revision or retraction in the future, which may restrict the Company's or Royalty Producers' access to banking services. The inability of the Company to access banking services can make it difficult to structure royalty agreements in a manner acceptable to the Company.

In the event financial service providers do not accept accounts or transactions related to the marijuana industry, it is possible that Royalty Producers may seek alternative payment solutions, including but not limited to crypto currencies such as Bitcoin. There are risks inherent in crypto currencies, most notably its volatility and security issues. If the industry was to move towards alternative payment solutions and accept payments in crypto currency the Company would have to adopt policies and protocols to manage its volatility and exchange rate risk exposures. The Company's inability to manage such risks may adversely affect the Company's operations and financial performance.

Enforcement Risk

The sale and distribution of marijuana in certain U.S. States is legal subject to compliance with applicable state regulatory regimes. U.S. federal law currently classifies marijuana as a controlled substance and its manufacture, sale, distribution, and use is illegal under U.S. federal law. The U.S. Department of Justice has indicated in the Cole Memo that is does not intend to interfere with the sale or distribution of marijuana in U.S. States where such sale and distribution is legal provided the regulations are complied with.

Certain U.S. States have recently legalized marijuana that is grown and sold pursuant to applicable laws and regulations for medical purposes (as opposed to recreational purposes) (“Medical Marijuana”). Two U.S. States have further legalized the recreational use of marijuana.

While the marijuana industry is legal in certain U.S. States, it is regulated differently. Consequently, certain activities conducted by the Company may be permissible under one regulatory regime while not under another. Additionally, because marijuana is illegal under U.S. federal law, the courts in the U.S. may take the position that parties to contracts involving marijuana, whether directly or indirectly, may not enforce such contracts because they concern an illegal product or activity.

Our ability to grow and compete in the future will be adversely affected if adequate capital is not available to us or not available on terms favorable to us.

The Company is not currently profitable, there is no guarantee that the Company will ever become profitable, and if the Company does become profitable, this is no guarantee that it will remain profitable. The Company may need to raise additional financing to support its operations and such financing(s) will be dilutive to the Company’s stockholders. There is no guarantee that the Company will be able to raise such additional financing on terms acceptable to the Company or its stockholders, or even to raise such additional financing at all.

The ability of our business to grow and compete depends on the availability of adequate capital, which in turn depends in large part on our cash flow from operations and the availability of equity and debt financing. We cannot assure you that our cash flow from operations will be sufficient or that we will be able to obtain equity or debt financing on acceptable terms or at all to implement our growth strategy. We estimate that we will need a minimum of $4,000,000 to successfully implement our short-term business plans. As a result, we cannot assure you that adequate capital will be available to finance our current growth plans, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business.

We have a Limited Operating History and have not yet generated revenues.

The Company is an early stage business that was founded in 2013, with a limited operating history from which to evaluate its business prospects. The Company faces risks encountered by early stage companies in general, including but not limited to: difficulty in raising sufficient funding to achieve growth objectives, uncertainty of market acceptance of the Company’s products and services, and the ability to attract and retain qualified personnel. There can be no guarantees that the Company will be successful in managing these risks, and if the Company is unsuccessful in doing so, the Company’s investors face the risk of losing their entire investment.

We are operating under a new and unproven business plan.

The Company’s potential for future profitability must be considered in light of the risks, uncertainties, and difficulties encountered by companies that are in new and rapidly evolving markets and continuing to innovate with new and unproven technologies or services, as well as undergoing significant change. If the Company fails to adapt or innovate as these changes occur, investors face the risk of losing their entire investment.

Our new business model may be subject to legal and regulatory compliance.

The Company has a new, emerging, untested, and evolving business model and it is unclear how existing and/or future statutes and regulations currently apply or will apply to the Company’s business model. Such laws and regulations include, but are not limited to, the regulations adopted by the Washington State Liquor Control Board and the Colorado Department of Revenue, the Washington criminal code, the Colorado criminal code, and federal criminal statutes.

The Company’s operations may also be subject to municipal zoning restrictions.

Certain municipalities have placed zoning restrictions on where cannabis retailers, producers, and processors may be located. Restrictions on the Company’s ability to obtain the best production, processing or retail locations could have significant impacts on the Company’s ability to meet its financial and growth objectives.

The Company’s product and service offerings are still in the early developmental stage.

If the Company fails to develop products and services on schedule or to further develop and refine its product and service offerings to meet customer demand, and/or if customers fail to adopt the Company’s product and service offerings at the price points presently contemplated by the Company, the Company’s financial condition, prospects, and results from operations will be materially affected.

The Company relies on intellectual property rights.

The Company relies on a combination of trade secrets, non-disclosure, and other contractual arrangements, and copyright and trademark laws to protect its proprietary rights. The Company’s future success is dependent, in part, upon its ability to protect its intellectual property rights. The Company seeks to enter into confidentiality agreements with its partners, suppliers, and associates and generally requires that its partners, suppliers, and associates enter into such agreements, and limits access to and distribution of proprietary information. There can be no assurance that the steps taken by the Company in this regard will be adequate to deter misappropriation of its proprietary information or that the Company will be able to detect unauthorized use of and take the appropriate steps to enforce its intellectual property rights.

We may not be successful in competing current and future participants in our industry.

The cannabis-related services industry is evolving rapidly and without certainty, and the Company may not be successful in competing against current and future participants in this market. Some of the Company’s competitors may have longer operating histories, possess greater industry and brand name recognition, and/or have significantly greater financial, technical, and marketing resources than does the Company.

Unfavorable media coverage could affect the company’s business.

The Company may receive a high degree of media coverage, both in the U.S. and around the world. Unfavorable publicity regarding the Company, its business model, its industry, its directors, officers and senior management team, product or service offerings or changes, litigation, regulatory activity, or the Company’s customers could adversely affect the Company’s reputation. Such negative publicity could materially and adversely affect the Company’s operational and financial conditions, prospects, and results from operations.

Our operating results and financials could be materially affected by the operations of our tenants and occupants.

If the tenants of any property acquired or leased by the Company default under their leases or subleases, do not renew or extend their leases or subleases, or terminate their leases or subleases, or if issues arise with respect to the permissibility of certain uses of a property acquired or leased by the Company, the operating results and financial viability of that property and the Company could be substantially and materially affected. There is a risk of seizure of property by the federal or state governments if tenants are deemed to be operating outside of laws and or regulations.

We may face difficulty maintaining and attracting tenants.

The Company currently intends to hold properties in fee simple, or to lease them, and to lease or sublease them to tenants. There can be no assurance that the Company will be able to lease or sublease enough properties to meet its financial goals. It may be necessary to make substantial concessions in terms of rent and lease incentives, and construct unplanned tenant improvements to attract and retain tenants. If these expenditures and concessions are necessary and exceed the funds reserved out of the Company’s capital resources, the financial performance of the Company may be adversely affected.

There can be no assurance that cash flow or profits will be generated by any property held by the Company.

The lack of cash flow or profits would negatively affect the Company’s ability to meet its goals. The Company’s management is not obligated to provide investors with a guarantee against a loss on their investment or negative cash flows and the Company management does not have, nor do they intend to provide, such a guarantee.

Unfavorable changes in market and economic conditions could hurt property occupancy or rental rates.

The demand, price and rents for rental real property have historically been positively and negatively affected by the sector’s economic performance, any decrease in which could result in the market for real estate being adversely impacted.

Risks Related to Ownership of Our Common Stock

There is no public trading market for our Common Stock and you may not be able to resell your Common Stock.

There is no established public trading market for our securities. Although we intend to be quoted on the OTC Markets in the United States, our shares are not and have not been quoted on any exchange or quotation system. We cannot assure you that a market maker will agree to file the necessary documents with the FINRA, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate its investment, which will result in the loss of your investment.

Future issuance of our Common Stock could dilute the interests of existing shareholders.

We may issue additional shares of our Common Stock in the future. The issuance of a substantial amount of Common Stock could have the effect of substantially diluting the interests of our shareholders. In addition, the sale of a substantial amount of Common Stock in the public market, either in the initial issuance or in a subsequent resale by the target company in an acquisition which received such Common Stock as consideration or by investors who acquired such Common Stock in a private placement could have an adverse affect on the market price of our Common Stock.

We have no plans to pay dividends.

To date, we have paid no cash dividends on our common shares. For the foreseeable future, earnings generated from our operations will be retained for use in our business and not to pay dividends.

The application of the Securities and Exchange Commission’s “penny stock” rules to our Common Stock could limit trading activity in the market, and our shareholders may find it more difficult to sell their stock.

It is expected our Common Stock will be trading at less than $5.00 per share and is therefore subject to the SEC penny stock rules. Penny stocks generally are equity securities with a price of less than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our Common Stock and may affect your ability to resell our Common Stock.

We will have broad discretion over the use of the net proceeds to the company and may not use them effectively.

Our management will have broad discretion to use the net proceeds to the company for a variety of purposes, including, further development of our products and operations, working capital and general corporate purposes. We may spend or invest these proceeds in a way with which our shareholders disagree. Failure by our management to effectively use these funds could harm our business and financial condition. Until the net proceeds are used, they may be placed in investments that do not yield a favorable return to our investors, do not produce significant income or lose value.

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

As a public company, we will have significant additional requirements for enhanced financial reporting and internal controls. We will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.

Lack of experience as officers of publicly-traded companies of our management team may hinder our ability to comply with Sarbanes-Oxley Act.

It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance staff or consultants in order to develop and implement appropriate internal controls and reporting procedures.

We will incur increased costs as a public company which may affect our profitability.

Bio-En previously operated as a private company in Delaware. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the SEC’s rules and regulations relating to public disclosure. SEC disclosures generally involve a substantial expenditure of financial resources. Compliance with these rules and regulations will significantly increase our legal and financial compliance costs and some activities will become more time-consuming and costly. Management may need to increase compensation for senior executive officers, engage additional senior financial officers who are able to adopt financial reporting and control procedures, allocate a budget for an investor and public relations program, and increase our financial and accounting staff in order to meet the demands and financial reporting requirements as a public reporting company. Such additional personnel, public relations, reporting and compliance costs may negatively impact our financial results.

In the event a market develops for our Common Stock, the market price of our Common Stock may be volatile.

In the event a market develops for our Common Stock, the market price of our Common Stock may be highly volatile, as is the stock market in general, and the market for OTC Market quoted stocks in particular. Some of the factors that may materially affect the market price of our Common Stock are beyond our control, such as changes in financial estimates by industry and securities analysts, conditions or trends in the industry in which we operate or sales of our Common Stock. These factors may materially adversely affect the market price of our Common Stock, regardless of our performance. In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our Common Stock.

Public company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these rules and regulations to increase our compliance costs and to make certain activities more time consuming and costly. As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

Because our directors and executive officers are among our largest shareholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from those of subscribers in the Offering.

Our directors and executive officers collectively and beneficially own approximately 48% of outstanding common stock. Additionally, the holdings of our directors and executive officers may increase in the future upon vesting or other maturation of exercise rights under any of the options or warrants they may hold or in the future be granted or if they otherwise acquire additional shares of our Common Stock. The interests of such persons may differ from the interests of our other shareholders, including purchasers of Units in the Offering. As a result, in addition to their board seats and offices, such persons will have significant influence over and control all corporate actions requiring shareholder approval, irrespective of how the Company’s other shareholders, including purchasers in the Offering, may vote, including the following actions:

	●	to elect or defeat the election of our directors;
	●	to amend or prevent amendment of our Certificate of Incorporation or By-laws;
	●	to effect or prevent a merger, sale of assets or other corporate transaction; and
	●	to control the outcome of any other matter submitted to our shareholders for vote.

Such persons’ stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.

Item 2.

Financial Information

MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition for the year ended December 31, 2014 and for the period of August 26, 2013 (inception) to December 31, 2013, should be read in conjunction with our financial statements and the notes to those financial statements that are attached as Exhibit A to this Report. The Financial Statements should not be relied on for an understanding of the current financial status of the Company.

OVERVIEW AND OUTLOOK

Our Operations

Diego Pellicer Worldwide, Inc. was established on August 26, 2013 to take advantage of the recent legislation that allowed for the legalization of cannabis operations in several states, namely Colorado, Washington and Oregon, with a number of other states giving consideration to this market as well. The industry will operate under stringent regulations within the various state jurisdictions.

The Company’s primary business plan was to lease various properties and develop them in a manner that would allow others to grow, process and retail cannabis and related products. These leases were designed to provide a substantial stream of income. It is hoped that as laws evolve, the Company can participate directly in these operations as well.

REVENUES

				From Inception
	Year Ended			(August 26, 2013) to
	December 31,			December 31,		Increase (Decrease)
	2014			2013		$			%
REVENUES
Rental income	$	497,638		$	-	$	497,638			*
Licensing revenue		48,567			-		48,567			*
Provision for uncollectable rents		(497,638	)		-		(497,638	)		*
Total Revenues	$	48,567		$	-	$	48,567			*

* Not divisible by zero

For the four months of operation in 2013, the Company was only functionally in the organizational and developmental stage, and did not generate any revenues for that short period, as the focus was to secure investment funding.

In 2014, after securing initial funding, the Company began to lease certain properties and secured an appropriate sub-lessee. However, the industry being in its infancy, this tenant was also in a development stage of operations and could not conduct operations until they received the proper licenses from the State. As a result, the Company entered into a $2.5 million Line of Credit Agreement with the tenant, wherein, they would provide funds for development of the properties to grow, process and sell their products. In addition, they would also underwrite the rental cost until they became operational, which is expected in early summer of 2015.

In 2014, the Company recorded rental income of $497,638 but management felt it prudent to provide a full reserve for the potential uncollectibility until such time that the tenant obtains the appropriate licenses.

In January 2014, the Company also entered into a Licensing Agreement with Plandai Biotechnology, publicly traded company, to license their Diego Pellicer brand in exchange for 3,333,334 warrants with a 10-year term, to purchase Plandai’s common stock. At the time of the Agreement, the publicly traded shares in Plandai were valued at $525,567. In October 2014, the Company filed a Notice of Exercise to obtain the shares, and have recorded their value as deferred income. For the year ended 2014, $48,567 was recognized as licensing revenue.

RESULTS OF OPERATION

				From Inception
	Year Ended			(August 26, 2013) to
	December 31,			December 31,		Increase (Decrease)
	2014			2013		$			%
COSTS AND EXPENSES (other income)
General and administrative expenses	$	3,624,507		$	412,646	$	3,211,861			778.4	% (a)
Rent expense		487,533			-		487,533				(b)
Write-off of line of credit receivable		777,816			-		777,846			-	(b)
Other income (interest)		(73,198	)		-		(73,198	)		-	(b)
Total costs and expenses	$	4,816,688		$	412,646	$	4,404,042			1067.3	% (a)

(a) Being a start-up with only 4 months of activity does not make the % change meaningful

(b) Not divisible by zero

General and administrative. Our general and administrative expenses for the twelve months ended December 31, 2014 were $3,624,507, which represents an increase of $3,211,861, or 778.4% from general and administrative costs for the four months ended December 31, 2013 of $412,646. Included in general and administrative costs are consultants, professional fees, travel and entertainment, compensation to founding members, and other operating expenses.

Consultants. Our consultant costs for the twelve months ended December 31, 2014 were $982,896, which represents an increase of $776,911, or 377.2% from the four months ended December 31, 2013 of $205,985. The principal difference was related to a full year’s amount versus only four months in 2013. The remaining effect can be attributed to increases in the compensation authorized by contractual agreement in September 2014.

Professional and other fees. Our professional fees for the twelve months ended December 31, 2014 were $544,907, which represents an increase of $444,820, or 444.4% from the four months ended December 31, 2013 of $100,087. The large increase was mainly due to increased legal fees related to both the organizational development and structure of the Company and financing efforts to raise capital.

Travel and entertainment. Our travel and entertainment expenses for the twelve months ended December 31, 2014 were $384,324, which represents an increase of $311,262, or 426.0% from the four months. Much of the increase was due to extensive travels nationally and internationally seeking investment capital, property acquisition and legal matters. The amount spent in 2013 was mostly attributable to development efforts.

Compensation founding members. The compensation expense to founding members of $1,176,563 in 2014 is related to the accounting treatment for awarding common stock options under the Equity Incentive Plan to those individuals and firms who were instrumental to the development of the Company. There was no stock granted in 2013.

Other operating expenses. Our other operating expenses for the twelve months ended December 31, 2014 were $485,203 which represents an increase of $451,691, or 1347.8% over the $33,512 incurred for the four months ended December 31, 2013. These expenditures consisted of normal costs including, but not limited to, marketing and promotion, utilities, supplies, design and other fees.

Rent expense. Our rental expenses for the twelve months ended December 31, 2014 were $487,533 compared to no rent expense for the four months ended December 31, 2013. The rental amount incurred is attributable to the leasing cost for properties acquired for sublease to those who would operate the growing, processing and selling of cannabis products. In addition, there were several properties leased that have either yet to be subleased or abandoned as not viable opportunities.

Bad debt expense. Bad debt expense for the twelve months ended December 31, 2014 was $777,846 and was comprised of the provision against the $2.5 million line of credit to the sub-lessee for both a loan for operating and development costs and the accrued interest due. The Company advances funds for their operational costs to develop these properties, as they await licensing by the State to begin operations. There was no line of credit in 2013.

Other income (interest). The interest income as of December 31, 2014 represents the interest that was charged to the lessee for the $2.5 million line of credit in developing the properties. It is reported as an offset in the costs and expenses to correspond to the bad debt expense.

LIQUIDITY AND CAPITAL RESOURCES

				Since Inception
	Year Ended			(August 26, 2013) to
	December 31,			December 31,			Increase (Decrease)
	2014			2013			$			%
Net Cash used in operating activities	$	(2,602,044	)	$	(329,151	)	$	(2,272,893	)		690.5	%
Net Cash used in investing activities		(1,209,899	)		(74,341	)		(1,135,558	)		1527.5	%
Net cash provided by financing activities		3,704,960			543,576			3,161,384			581.6	%
Net (Decrease) Increase in Cash		(106,983	)		140,084			(247,067	)		-176.4	%
Cash - beginning of period		140,084			-			140,084
Cash - end of year	$	33,101		$	140,084		$	(106,983	)		-76.4	%

Operating Activities. The net cash used for the year ended in December 31, 2014 was $2,602,044, an increase of $2,272,893 over the year ended December 31, 2013. The primary factor was generated by the large net loss of $4,768,121, compared to the loss for the year ended December 31, 2013 of $412,646.

A significant portion of that loss can be attributed largely to reserve for bad debts ($777,846) and the potential uncollectibility of rent subleases ($497,638). Another large contributor to the loss was the expense reported for awarding Equity Incentive stock to founding members ($1,176,563). The other contributing factors extensive professional fees and higher consultant’s fees incurred for a full year compared to the four month period from 2013.

Investing Activities. The cash used for investing activities for the year ended December 31, 2014 and December 31, 2013 was $1,209,899 and $74,341 respectively. The major factors for this increase of $1,135,558 were security deposits and end-of-lease deposits in acquiring the properties totaling $303,000, and the build out and acquisition of certain property and cushion.

Financing Activities. Funds provided for the year ended December 31, 2014 was $3,704,960, a significant increase of $3,161,384 over the $543,576 provided for the year ended December 31, 2013. Virtually, all of the funds provided came from investors in the Series A Preferred offering.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of March 13, 2015.

Inflation

We do not believe that inflation has had a material effect on our Company’s results of operations.

Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial condition and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. We consider the following policies to be the most critical in understanding the judgment that is involved in preparing our consolidated financial statements.

Fair value of financial instruments

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of and December 31, 2014 and December 31, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Cash

The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company's accounts at these institutions may, at times, exceed the federal insured limits. The Company has not experienced any losses in such accounts.

Property and equipment and depreciation policy

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.

The Company intends to take depreciation or amortization on a straight-line basis for all properties, beginning when they are put into service, using the following life expectancy:

Equipment – 5 years

Leasehold Improvements – 10 years, or the term of the lease, whichever is shorter

Buildings – 20 years

Revenue recognition

The Company recognizes revenue from rent, tenant reimbursements, and other revenue sources once all of the following criteria are met in accordance with SEC Staff Accounting Bulletin 104, Revenue Recognition, (“SAB 104”): (a) the agreement has been fully executed and delivered; (b) services have been rendered; (c) the amount is fixed or determinable; and (d) the collectability of the amount is reasonably assured.

In accordance with FASB Statement of Financial Accounting Standards No. 13, Accounting for Leases (“SFAS 13”), as amended and interpreted, minimum annual rental revenue is recognized in rental revenues on a straight-line basis over the term of the related lease. Rental revenue recognition commences when the tenant takes possession or controls the physical use of the leased space. In order for the tenant to take possession, the leased space must be substantially ready for its intended use. To determine whether the leased space is substantially ready for its intended use, management evaluates whether the Company or the tenant is the owner of tenant improvements for accounting purposes. When management concludes that the Company is the owner of tenant improvements, rental revenue recognition begins when the tenant takes possession of the finished space, which is when such tenant improvements are substantially complete. In certain instances, when management concludes that the Company is not the owner (the tenant is the owner) of tenant improvements, rental revenue recognition begins when the tenant takes possession of or controls the space.

When management concludes that the Company is the owner of tenant improvements, for accounting purposes, management records the cost to construct the tenant improvements as a capital asset. In addition, management records the cost of certain tenant improvements paid for or reimbursed by tenants as capital assets when management concludes that the Company is the owner of such tenant improvements. For these tenant improvements, management records the amount funded or reimbursed by tenants as deferred revenue, which is amortized as additional rental income over the term of the related lease. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, management records the Company’s contribution towards those improvements as a lease incentive, which is amortized as a reduction to rental revenue on a straight-line basis over the term of the lease.

In January 2014, the Company entered into an agreement to license certain intellectual property to a third party. In consideration, the Company received warrants to purchase shares of common stock, which were valued based on an appraisal of the warrants by an independent third party appraiser. The revenue from the licensing agreement, which is initially recorded as deferred revenue, is being amortized over the ten year term of the licensing agreement.

The Company records is rents due from the tenants on a current basis. However, as part of the Line of Credit Agreement, the Company has deferred collection of such rents until the tenants receive the proper governmental licenses to begin operation. It is anticipated that such licenses should be obtained in early summer 2015. Management has decided to take the prudent approach and reserve these amounts due to the contingency factor and experience with typical delays in governmental action.

Leases

The Company currently leases properties in locations that would be acceptable for regulatory purposes and acceptable to sub-lessees for the manufacturing and development of their products. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company currently has a number of leases, which are all classified as operating leases.

Minimum base rent for the Company’s operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The initial rent term includes the build-out, or may include a short rent holiday period, for the Company’s leases, where no rent payments are typically due under the terms of the lease.

Income Taxes

Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, the Company continually assesses the carrying value of their net deferred tax assets.

Research and development costs

Research and development costs are charged to the statement of operations as incurred.

Preferred Stock

We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly all issuances of preferred stock are presented as a component of consolidated stockholders’ equity (deficit).

Common Stock Purchase Warrants and Other Derivative Financial Instruments

We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess classification of our common stock purchase warrants and other free standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

Stock-Based Compensation

We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, we calculate the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.

Recently Issued Accounting Pronouncements

There are no recently issued accounting pronouncements that are expected to have a material impact on the consolidated financial statements or notes thereto.

Item 3.

Properties

The Company has five properties described below:

	●	Production Facility - 4242 Elizabeth St. Denver, CO (18,000 square feet). The property is completely built out and operational. It currently has 200 flower hoods and has the room to add an additional 400 flower hoods, if necessary. Once 400 flower hoods are in use, the facility has the capability of producing 3,600 pounds of product per year.
	●	Retail and Production Facility - 755 South Jason St Denver, CO (14,800 square feet, 2,000 square feet of retail space). The property is completely built out and operational and has 300 flower hoods. It has the capability of producing 2,700 pounds of product per year.
	●	Retail Facility - 2949 W Alameda Avenue Denver, CO (3,300 square feet). The property is a free standing facility.
	●	Retail Facility - 2215 4th Avenue S. Seattle, WA (4,500 square feet). The property is a free standing facility.
	●	Production Facility - 800 N 42nd Street Springfield, OR (16,060 square feet). The property has the capacity to hold 400 flower foods and the capability of producing 3,600 pounds of product per year.

Item 4.

Security Ownership Of Certain Beneficial Owners And Management

The following table sets forth certain information as of March 13, 2015, with respect to the holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our Common Stock; (2) each of our directors, nominees for director and named executive officers; and (3) all directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated.

Name of Beneficial Owner and Address (1)	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Common Stock (2)
5% Shareholders
TMK Holdings LLC (3)		3,840,000		13.43	%
Wall Street Capital Partners LLC (4)		7,020,000		25.12	%
Directors and Executive Officers
Philip Gay(5)		75,000		*
Douglas Anderson		5,882,800		21.04	%
Alan Valdes (4)		3,900,000		13.95	%
Stephen Norris		59,000		*
Ron Throgmartin (4)		1,820,000		6.51	%
Nick Roberts		*			*

All directors and officers as a group (4 people)				41.87	%

(1)	Unless otherwise noted, the address of each beneficial owner is c/o 6800 Owensmouth Avenue, Suite 350, Los Angeles, CA 92303.
(2)	Based on 27,954,469 shares of Common Stock issued and outstanding as of March 13, 2015.
(3)	TMK Holdings holds 3,200,000 shares of common stock and 640,000 warrants.
(4)	7,020,000 shares of Wall Street Capital Partners LLC are beneficially owned as follows: (a) 3,900,000 by Alan Valdes; (b) 1,160,000 Ron Throgmartin, (c) 910,000 Julie Throgmartin, the wife of Ron Throgmartin, and (d) 1,300,000 by Steve Hubbard.
(5)	Philip Gay holds 75,000 warrants in the Company.
*	Less than 1 percent

Changes in Control

We are not aware of any person who owns of record, or is known to own beneficially, five percent or more of our outstanding securities of any class, other than as set forth above. Reference is made to Item 2.01 and Item 5.01 for a description of the change in control of the Company as a result of the transactions disclosed herein.

Item 5.

Directors And Executive Officers

The following table sets forth the names and ages of all of our directors, executive officers and key employees; and all positions and offices held as of the date of this Report. The directors will hold such office until the next annual meeting of shareholders and until his or her successor has been elected and qualified.

Name	Age	Position
Philip Gay	57	Chief Executive Officer, Director
Nick Roberts	73	Chief Financial Officer
Ron Throgmartin	51	Chief Operating Officer
Alan Valdes	56	Chairman of the Board
Douglas Anderson	52	Director
Steve Norris	64	Director

Business Experience

The following summarizes the occupation and business experience during the past five years for our officers, directors and key employees as of the date of this Report:

Officers and Directors

Philip Gay joined the Company as Chief Executive Officer in February 2015. Mr. Gay currently serves as Managing Director of Triple Enterprises, a business advisory service firm that assists mid-cap sized companies with financing, mergers and acquisitions and strategic financing, which he had previously managed from March 2000 until June 2004. From June 2004 until June 2010, Mr. Gay served as President, Chief Executive Officer and a Director of Grill Concepts, Inc., a company that operates a chain of upscale casual restaurants throughout the United States. From March 2000 to November 2001, Mr. Gay served as an independent consultant with El Paso Energy from time to time and assisted El Paso Energy with its efforts to reduce overall operating and manufacturing overhead costs. Previously he has served as chief financial officer for California Pizza Kitchen (1987 to 1994) and Wolfgang Puck Food Company (1994 to 1996), and he has held various Chief Operating Officer and Chief Executive Officer positions at Color Me Mine and Diversified Food Group from 1996 to 2000. Mr. Gay is also a retired Certified Public Accountant, a former audit manager at Laventhol and Horwath and a graduate of the London School of Economics. Mr. Gay should serve as a member of our board of directors due to the perspective and experience he brings as CEO and his former experiences in executive positions at other large corporations.

Nick Roberts joined the Company as Chief Financial Officer of the Company in March 2015. Mr. Roberts currently works at as a Financial Manager at Triple Enterprises which he joined in October 2014. Previously, he had been in the executive search field for more than 25 year where he founded Pacific Search Group, Inc., in 1997 and Spectrum Search Associates, Inc. in 1987, before selling his interest in the firm. He conducted searches primarily for senior level financial talent. Prior to this, he worked in the private sector for over 20 years and rose to CFO for some major national companies, including IHOP Corp. (now DineEquity, Inc.), an international restaurant chain His early career began with a large CPA firm, where he obtained his CPA. Nick received both his B.S. and MBA degrees from the University of California, Los Angeles. We believe that Mr. Roberts should serve as a member of our board of directors due to the perspective and experience he brings as our CFO.

Ron Throgmartin joined as CEO of Diego Pellicer Worldwide Inc. in August 2013. Mr. Throgmartin currently serves as COO. In May 2010 Mr. Throgmartin began serving as an independent consultant for a medical marijuana company in Colorado where he managed State licensing, compliance, retail operations and production. From 2003-2008 Mr. Throgmartin was involved with the largest privately owned cattle producers in the United States with operations that encompassed 11 states. In 1989, Mr. Throgmartin started his own commercial development company, where over a span of 20 years he developed over 3 million square feet of commercial projects, working with some of the top rated retailers in the country, including Lowes, Home Depot, HH Gregg, Staples, McDonalds, Steak-n-Shake. From 1981-1989 Mr. Throgmartin worked for his family business HH Gregg, where he served in many roles including Operations and new and store development. Today HH Gregg (HHG) is a publicly owned and operated appliance and electronics retailer covering 16 states, and over $2.4 billion in annual sales. Mr. Throgmartin is a graduate of Ball State University with a Bachelor of Science degree. We believe that Mr. Throgmartin should serve as a member of the board of directors due to the perspective and experience he brings as our COO and his experience in the medical marijuana industry.

Douglas Anderson is the Founder, Vice-Chairman of the Board and Senior Vice President of Strategy and Vision of the company. Mr. Anderson serves as CEO of Wall Street Capital Partners, a Wall Street consulting firm that assists early stage, high growth companies. Mr. Anderson is on the Advisory Boards of the U.N., U.S. Veterans Cemetery and Strang Cancer Prevention Center (Strang invented the PAP Test, which has saved more women from cancer than all other preventatives combined). From 1997 to 2008, Mr. Anderson served as President of Anderson Corporate Finance and Investments a business advisory, development and management firm. From 1995 to 1997 Mr. Anderson worked as an investment banker for a northwest merchant bank. From 1988 to 1995 Mr. Anderson was formally trained as an underwriter in New York and worked for Fortune 500 companies in financial services. Mr. Anderson served in the U.S.M.C. with the elite reconnaissance battalion overseas and also at American Embassies for the U.S. State Department. Mr. Anderson is a graduate of the University of Washington and attended Texas A&M and Harvard. We believe that Mr. Anderson should serve as a member of the board of directors due to his experience working with early stage corporations, like the Company.

Alan Valdes has operated as Chairman of the Company since inception. Mr. Valdes has over 35 years’ experience on Wall Street. He appears regularly on television giving market comments on such networks as CNN, CNBC, CCTV and many other domestic and foreign media outlets. Since 2013, Mr. Valdes has worked as a senior partner at SilverBear Capital Inc., where he is in charge investment and development projects in the United States and Canada. Additionally, Mr. Valdes is currently a partner at Wall Street Capital Partners, a boutique Wall Street consultant that assists clients in accomplishing what the best and largest firms do within a fraction of the cost and time. He is also a co-founder and partner of the Louisiana International Gulf Terminal project, a $1.5 billion port project, the largest in the United States. He is also currently a board member of the World Air League and the Strang Cancer Prevention Center. Mr. Valdes is a graduate on Seton Hall University, New York University and Harvard University. We believe that Mr. Valdes should serve as a member of the board of directors due to his experience working for the Company since inception and the with early stage corporations, like the Company.

Steve Norris was elected a director of the Company in October 2015. Currently serving as Chairman of Stephen Norris Capital Partners, LLC, Mr. Norris has substantial expertise in structuring, negotiating and implementing leveraged buy-outs, cash-flow-based investments and financing strategies in the public and private capital markets. Mr. Norris is one of five co-founders of the Carlyle Group, a major merchant bank based in Washington, D.C. From 1988-1997, Mr. Norris served as Carlyle's President. He was a principal participant and key advisor in Carlyle's numerous investments in various public and private companies. While at Carlyle, Mr. Norris, along with other senior members of the Carlyle team, participated in the acquisition, disposition, strategic focusing and financing (in public and private markets) of numerous companies involving several billion dollars of equity capital. Carlyle invested in leveraged buyouts (LBOs), venture capital (particularly telecommunications and wireless companies in the pre-Internet days), and real estate. Today, Carlyle is one of the largest and most successful private equity firms in the world. Prior to co-founding Carlyle, Mr. Norris was a Corporate Vice President of Marriott Corporation in Washington, D.C. He was a principal strategist and advisor for Marriott's substantial public and private financings, limited partnerships, acquisitions and divestitures from 1981 to mid-1987. In 1992, Mr. Norris was appointed by President George Bush, and confirmed by the U.S. Senate, as one of the five board members of the approximately (at the time) $68 billion Federal Retirement Thrift Investment Board. During his tenure (1992-1995), Mr. Norris successfully advocated for the right of Federal employees to allocate a greater portion of their savings into public equities. Until late 1996, Mr. Norris served on the Advisory Committee of SEAG, Inc. which advises the Saudi Government on economic development and diversification within the Kingdom of Saudi Arabia. Mr. Norris was a Fellow at Yale Law School (1977) and received a B.S. and J.D. (1972, 1975) with honors from the University of Alabama, and an L.L.M. from New York University (1976). Management believes that Mr. Norris’ past experience qualifies him for his position with the Company.

Family Relationships

No family relationship has ever existed between any director, executive officer of the Company, and any person contemplated to become such.

Committees

The board of directors has no standing committees. However, the Company intends to implement a comprehensive corporate governance program, including establishing various board committees and adopting a Code of Ethics in the future.

Item 6.

Executive Compensation

The following table shows for the period ended December 31, 2014, the compensation awarded (earned) or paid by the Company to its named executive officers or acting in a similar capacity as that term is defined in Item 402(a)(2) of Regulation S-K. There are no understandings or agreements regarding compensation that our management will receive after a business combination that is required to be included in this table, or otherwise.

Name and Principal Position	Fiscal Year		Salary ($)		Bonus		Option Awards		All Other Compensation		Total ($)

Doug Anderson - VP Strategy	2014	Accrued	$	204,500	$	0	$	0	$	0	$	204,500
		Paid	$	192,833							$	192,833
	2013	Accrued	$	56,250	$	0	$	0	$	0	$	56,250
		Paid	$	47,500							$	47,500

Steven Hubbard - CFO	2014	Accrued	$	180,000	$	0	$	0	$	0	$	180,000
		Paid	$	139,667							$	139,667
	2013	Accrued	$	70,000	$	0	$	0	$	0	$	70,000
		Paid	$	70,000							$	70,000

Alan Valdes - Chairman	2014	Accrued	$	195,000	$	0	$	0	$	0	$	195,000
		Paid	$	154,667							$	154,667
	2013	Accrued	$	18,000	$	0	$	0	$	0	$	18,000
		Paid	$	10,000							$	10,000

Ron Throgmartin - Former CEO	2014	Accrued	$	213,250	$	0	$	0	$	0	$	213,250
		Paid	$	181,250							$	181,250
	2013	Accrued	$	52,500	$	0	$	0	$	0	$	52,500
		Paid	$	50,000							$	50,000

Steven Norris - Board Member	2014	Accrued	$	25,000	$	0	$	0	$	0	$	25,000
	2013		$	0	$	0	$	0	$	0	$	0

Employment and Director Agreements

The Company entered into a consulting agreement with Triple Enterprises and affiliates on August 26, 2014. In exchange for 200,000 warrants and a monthly fee of $35,000, Triple Enterprises agreed to act as a financial advisor, provide supervisory and advisory services and assist in the preparation of the Company’s public filings. Mr. Philip Gay is the Managing Director of Triple Enterprises and Mr. Nick Roberts is the Financial Manager of Triple Enterprises.

On September 17, 2014, the Company entered into a five year employment agreement with Doug C. Anderson as Vice Chairman and Vice President of Strategy and Vision. Beginning in 2014, Mr. Anderson began earning an annual salary of two hundred fifty thousand dollars ($250,000) per annum. Following the completion of an offering of the Company’s Series A Preferred stock, the Executive’s Base Salary shall automatically be increased to Two Hundred Eighty Thousand ($280,000) per annum. For each year thereafter, the Company’s Board (or compensation committee of the Company’s Board, or, at the discretion of the Company’s Board, by a committee composed of two or more members of the Company’s Board (for purposes of this Agreement, the “Committee”) shall review the Executive’s Base Salary and may provide for such increases therein as it may, in its discretion, deem appropriate. The employment agreement also allows for a performance bonus, to be determined by the Company’s Board at the discretion of the Company’s Board, and participation of any equity compensation plan of the Company.

If Mr. Anderson’s employment is terminated prior to the expiration of the term of his employment agreement, certain significant payments become due. The amount of such payments depends on the nature of the termination. In addition, the employment agreement contains a change of control provision that provides for the payment of three times the then current base salary and five times the average bonus paid to Mr. Anderson for the three full calendar years immediately prior to the change of control. The employment agreement also contains both a confidentiality and noninterference provision which are effective from the date of employment through one year from the date the employment agreement is terminated.

Mr. Ron Throgmartin and Mr. Alan Valdes entered into agreements with identical terms to that of Mr. Anderson, for the position of Chief Executive Officer and Chairman of the Board respectively. Following the Merger, Mr. Throgmartin’s position was changed to Chief Operating Officer. The other terms of his agreement remained in place.

In exchange for Mr. Norris’ service on the Board, he received 50,000 warrants with an exercise price of $0.0001. In addition, Mr. Norris currently receives $10,000 per month in exchange for his services on the Board.

Option Plan

The Company established an Equity Incentive Plan to provide additional incentive to key employees, directors and consultants, and to promote the success of the Company’s business. The terms of each option shall be no more than 10 years from the date of grant at an exercise price equal to the Fair Market Value on the date of the grant.

Item 7.

Certain Relationships And Related Transactions

Except as disclosed below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party:

(A)

Any of our directors or officers;

(B)

Any proposed nominee for election as our director;

(C)

Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our Common Stock; or

(D)

Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.

Director Independence

Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:

●

the director is, or at any time during the past three years was, an employee of the company;

●

the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

●

a family member of the director is, or at any time during the past three years was, an executive officer of the company;

●

the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

●

the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

We do not have any independent directors. We do not have an audit committee, compensation committee or nominating committee. We currently do not have a code of ethics that applies to our officers, employees and director.

Item 8.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results, with the exception of those outlined below:

On May 23, 2014, Diego Pellicer Worldwide Inc. received a subpoena from the United States Department of Justice, represented by the United States Attorney’s Office for the Western District of Washington, requesting the production of the Company’s banking records and documents and records relating to: the structure and organization of the Company; communications between the Company and its affiliates, including Diego Pellicer, Inc., with potential investors; securities offerings; applications submitted by Diego Pellicer, Inc. to the Washington State Liquor Control Board in connection with its application to become a retail seller of cannabis in Washington State; and the Company’s relationship with Plandai Biotechnology.

Based on limited discussions with the Department of Justice, the Company believes this subpoena was issued in order to determine: (i) if the Company is or has been engaged in the production, processing or sale of cannabis; (ii) how the Company is related to Diego Pellicer, Inc.; and (iii) whether investors or potential investors in the Company believed they were investing in a company that would be engaged in the production, processing or sale of cannabis.

The Company believes that it has complied fully with all applicable laws, rules and regulations, and intends to cooperate fully with the government’s investigation.

Depending on the extent to which the Department of Justice pursues this matter, the Company may be required to suspend or cease its operations, which could lead to the possible loss of investors’ entire investment in the Company.

Further, in the event the Company, its officers or its directors are determined to have taken any unlawful action with respect to these matters, such officers and directors may be barred from performing services on behalf of the Company and/or incarcerated, the Company may be required to pay fines, and/or the Company may be required to return investors’ investments in the Company. There can be no guarantee that the Company will have sufficient funds to pay all or any portion of such fines and/or return all or any portion of such investments made in the Company.

Item 9.

Market Price And Dividends On The Registrant’s Common Equity And Related Shareholder Matters

There is no established public trading market for our Common Stock. As of the date of this Report, there are outstanding options and warrants to purchase 3,425,798 shares of Common Stock of the Registrant.

Record Holders

As of March 17, 2015, there were approximately 67 shareholders of record holding a total of 27,954,469 shares of Common Stock. The holders of the Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Holders of the Common Stock have no preemptive rights and no right to convert their Common Stock into any other securities. There are no redemption or sinking fund provisions applicable to the Common Stock.

Dividends

The Registrant has not declared any cash dividends since inception and does not anticipate paying any dividends in the foreseeable future. The payment of dividends is within the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements, financial condition and other relevant factors. There are no restrictions that currently limit the Registrant’s ability to pay dividends on its Common Stock other than those generally imposed by applicable state law.

Item 10.

Recent Sales Of Unregistered Securities

Reference is made to the disclosure set forth under Item 3.02 of this Report, which disclosure is incorporated by reference into this section.

Item 11.

Description Of Securities

Authorized Capital Stock

Our authorized capital stock consists of 95,000,000 shares of capital stock, par value $0.000001 per share, and 5,000,000 shares of preferred stock, par value $0.000001 per share. As of March 13, 2015, 27,954,469 shares of our Common Stock and no shares of our Preferred Stock were issued and outstanding.

Common Stock

All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of shareholders of the Company. All shareholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The shareholders do not have cumulative or preemptive rights.

Preferred Stock

Our certificate of incorporation provides that we are authorized to issue up to 5,000,000 shares of preferred stock with a par value of $0.000001 per share. Our Board of Directors has the authority, without further action by the stockholders, to issue from time to time the preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights of the holders of common stock.

As of the date of this Report, no shares of preferred stock have been designated and none are issued and outstanding.

Dividends

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Warrants

Pursuant to the Merger, the Company will issue (a) 150,798 five year warrants with a strike price of $1.40, (b) 640,000 five year warrants with a strike price of $1.24 and (c) 475,000 five year warrants with a strike price of $1.50.

Options

There are no outstanding options to purchase our securities.

Item 12.

Indemnification Of Directors And Officers

(a) The Company shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any claim, action, suit, or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that the person, or a person for whom he or she is the legal representative, is or was a Director or officer of the Company or is or was serving at the request of the Company as a director, officer or fiduciary of another corporation or of a partnership, joint venture, trust, non-profit entity, or other enterprise, including service with respect to employee benefit plans, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person. The right to indemnification conferred in this Bylaw shall be a contract right. Except as provided in paragraph (c) of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Company shall indemnify a person in connection with a proceeding initiated by such person or a claim made by such person against the Company only if such proceeding or claim was authorized in the specific case by the Board of Directors of the Company.

(b) Subject to applicable law, the Company shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that if and to the extent required by law the payment of expenses incurred by any person covered hereunder in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by or on behalf of the affected person to repay all amounts advanced if it should ultimately be determined that such person is not entitled to be indemnified under this Bylaw or otherwise.

(c) If a claim for indemnification (following the final disposition of such proceeding) or advancement of expenses under this Bylaw is not paid in full within thirty days, or such other period as might be provided pursuant to contract, after a written claim therefor has been received by the Company, the claimant may file suit to recover the unpaid amount of such claim or may seek whatever other remedy might be provided pursuant to contract. In any such action the Company shall have the burden of proving that the claimant was not entitled to the requested indemnification or advancement of expenses under applicable law. If successful in whole or in part, claimant shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. Neither the failure of the Company (including its Directors, independent legal counsel or shareowners) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the claimant has met the applicable standard of conduct set forth in the General Corporation Law of Delaware, nor an actual determination by the Company (including its Directors, independent legal counsel or shareowners) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

(d) Any determination regarding whether indemnification of any person is proper in the circumstances because such person has met the applicable standard of conduct set forth in the General Corporation Law of Delaware shall be made in accordance with the applicable provisions of Section 145 of the General Corporation Law of Delaware.

(e) The Company may, but shall not be required to, indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any claim, action, suit, or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that the person, or a person for whom he or she is the legal representative, is or was an employee or agent of the Company or is or was serving at the request of the Company as an employee or agent of another corporation or of a partnership, joint venture, trust, non-profit entity, or other enterprise, including service with respect to employee benefit plans, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person.

(f) The rights conferred on any person by this Bylaw shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of shareowners or disinterested Directors or otherwise.

(g) Any repeal or modification of the foregoing provisions of this Bylaw shall not adversely affect any right or protection hereunder of any person with respect to any act or omission occurring prior to or at the time of such repeal or modification for which indemnification or advancement of expenses is sought.

(h) The Company’s obligation, if any, to indemnify or to advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

Item 13.

Financial Statements And Supplementary Data

Information concerning the financial information of the Registrant set forth under Item 9.01 of this Report is incorporated by reference.

Item 14.

Changes In And Disagreements With Accountants On Accounting And Financial Disclosure

None.

Item 5.01

Changes in Control of Registrant.

Reference is made to the disclosure set forth under Items 1.01 of this Report, which disclosure is incorporated herein by reference.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

Reference is made to the disclosure set forth under Items 1.01 and 2.01 of this Report, which disclosure is incorporated herein by reference.

Item 5.03

Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year

In anticipation of the Merger, the Company changed its name from “Type 1 Media, Inc.” to “Diego Pellicer Worldwide, Inc.” on February 26, 2015 (the “Name Change”).

On March 13, 2015, FINRA granted final approval of the Name Change and new Ticker Symbol of “DPWW”. Additionally FINRA approved an 11:1 forward split of the Company’s common stock, bringing the total issued and outstanding shares of Common Stock from 5,700,000 to 62,700,000 before the Merger. The total issued and outstanding shares of Common Stock following the Merger is 27,954,469. Unless otherwise stated, all share amounts in this Report have been updated to post-split numbers.

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired. In accordance with Item 9.01(a), the Company’s audited financial statements for the year ended December 31, 2014 and for the period from August 26, 2013 to December 31, 2013 are filed in this Current Report on Form 8-K as Exhibit 99.1.

(b) Pro Forma Financial Information. In accordance with Item 9.01(b), our pro forma financial statements are filed in this Current Report on Form 8-K as Exhibit 99.2.

(d) Exhibits

Exhibit No.		Description
2.1		Merger and Share Exchange Agreement, by and among the Company, Diego Pellicer World-wide 1, Inc., and Jonathan White, dated March 13, 2015.
3.1(i)		Articles of Incorporation
3.2		By-Laws
10.1		Employment Agreement by and between the Company and Ron Throgmartin, dated September 17, 2014
10.2		Employment Agreement by and between the Company and Doug C. Anderson, dated September 17, 2014
10.3		Employment Agreement by and between the Company and Alan D. Valdes, dated September 17, 2014
10.4		Commercial Agreement, by and between the Company and Diego Pellicer, Inc., dated April 19, 2014
10.5		Amended and Restated Agreement and Plan of Merger of Diego Pellicer Inc., and the Company, dated April 19, 2014
10.6		Cancellation Agreement, by and between the Company and Jonathan White, dated March 13, 2015.
10.7		Lease Agreement by and between the Company and Shamira, LLC, dated June 12, 2014
10.8		Lease Agreement, by and between the Company and 2949 W. Alameda Ave LLC, dated July 14, 2014
10.9		Sublease Agreement, by and between the Company and M&S LLC, dated August 14, 2014
10.10		Lease Agreement, by and between the Company and Oakway Golf Course, Inc., dated September 15, 2014
10.11		Sublease Agreement, by and between the Company and Diego Pellicer, Inc., dated March 1, 2014
10.12		Sublease Agreement, by and between the Company and DPCO, Inc., dated August 14, 2014 (4242 Elizabeth Street property)
10.13		Sublease Agreement, by and between the Company and DPCO, Inc., dated August 14, 2014 (2949 W. Alameda Avenue property)
10.14		Sublease Agreement, by and between the Company and DPCO, Inc., dated August 14, 2014 (755 South Jason Street property)
10.15		Lease Agreement, by and between the Company and M&P Properties, dated September 19, 2013
99.1		Consolidated Financial Statements for the year ended December 31, 2014
99.2		Pro Forma Financial Information
99.3		Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DIEGO PELLICER WORLDWIDE, INC.
Date: March 19, 2015
	By:	/s/ Philip Gay
		Name: Philip Gay
		Title: Chief Executive Officer
		(Duly Authorized, Principal Executive Officer)

Exhibit 2.1

EXECUTION COPY

MERGER AGREEMENT

This MERGER AGREEMENT (this “Agreement”), dated as of March 13, 2015 (the “Effective Date”), by and among DIEGO PELLICER WORLDWIDE, INC. (f/k/a Type 1 Media, Inc.), a Delaware corporation (“PubCo”), JONATHAN WHITE (the “PubCo Principal Shareholder”); and DIEGO PELLICER WORLD-WIDE 1, INC., a Delaware corporation (“Diego”). Each of PubCo, PubCo Principal Shareholder, and Diego is sometimes referred to herein as a “Party,” and together they are sometimes referred to herein as the “Parties.”

WITNESSETH:

WHEREAS, the respective Boards of Directors of PubCo and Diego have determined that it is advisable and in the best interests of the respective corporations and their shareholders to be merged (the “Merger”); and

WHEREAS, pursuant to the Merger and, in connection therewith, (i) each issued and outstanding share of common stock, par value $0.0001 per share, of Diego (“Diego Common Stock”), will be converted into one (1) share of PubCo common stock, $0.000001 par value per share (“PubCo Common Stock” or “PubCo Shares”); (ii) each issued and outstanding share of Series A Preferred Stock, par value $0.0001 per share, of Diego, with the exception of the TMK Shares (“Diego Series A Share”), will be converted into 1.031157 share(s) of PubCo Common Stock; (iii) each issued and outstanding share of the Series A Preferred Stock, par value $0.0001 per share, of Diego issued to TMK Holdings LLC (“TMK Shares”), will be converted into one (1) share of PubCo Common Stock (iv) each issued and outstanding share of Series B Preferred Stock, par value $0.0001 per share, of Diego (“Diego Series B Share”, and together with the Diego Common Stock, Diego Series A Shares and TMK Shares, the “Diego Shares”), will be converted into one (1) share of PubCo Common Stock; (v) the issued and outstanding warrant to purchase Diego Series A Shares (“Diego A Warrants”), will be converted into warrants to purchase share of PubCo Common Stock, in substantially the form attached hereto as Exhibit C (“PubCo A Warrants”); and (vi) the issued and outstanding warrant to purchase Diego Series B Shares (the “Diego B Warrants” and together with the Diego A Warrants, the “Diego Warrants”), will be converted into a warrant to purchase share of PubCo Common Stock, in substantially the form attached hereto as Exhibit D (“PubCo B Warrants” and, together with the PubCo A Warrant, the “PubCo Warrants”) in accordance with the provisions of Article II of this Agreement; and

WHEREAS, for federal income tax purposes, the Merger is intended to qualify as a tax-free reorganization under the provisions of Section 368 of the United States Internal Revenue Code of 1986, as amended (the “Code”); and

WHEREAS, PubCo and Diego desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe certain conditions to the Merger; and

WHEREAS, the respective Boards of Directors of each of PubCo and Diego have approved this Agreement and the merger on the terms and conditions contained in this Agreement;

Diego – Merger Agreement Execution Copy

WHEREAS, simultaneously, the PubCo Principal Shareholder owning an aggregate of 55,000,000 shares of PubCo’s shall enter into a Cancellation Agreement, dated as of the date of this Agreement, in substantially the form attached hereto as Exhibit A (the “Cancellation Agreement”), pursuant to which the PubCo Principal Shareholder agrees to cancel the 55,000,000 shares in PubCo, for an aggregate price of $169,000 (the “Cancellation Consideration”).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, the Parties, intending to be legally bound hereby, hereby agree as follows:

ARTICLE I
THE MERGER

Section 1.1 Cancellation and Merger. At the ‘Effective Time,’ as hereinafter defined, subject to the terms and on the conditions of this Agreement, Diego shall be merged with and into PubCo, with PubCo to continue as the surviving corporation (the “Surviving Corporation”) in the Merger, and PubCo succeeding to and assuming all the rights, assets, liabilities, debts, and obligations of Diego in accordance with the Delaware General Corporation Law (the “DGCL”). Simultaneously, at the Effective Time, the PubCo Principal Shareholder, owning an aggregate of 55,000,000 shares of PubCo’s common stock shall cancel the 55,000,000 remaining shares pursuant to the Cancellation Agreement.

Section 1.2 The Closing: Effective Time. The consummation of the Merger shall be effected as promptly as practicable, but in no event more than three business days after the satisfaction or waiver of the conditions set forth in Article VII of this Agreement, and the parties hereto will cause a copy of the Certificate of Merger, to be properly completed consistent with the terms hereof (the “Certificate of Merger”), and to be executed, delivered and filed with the Secretary of State of the State of Delaware (the “Closing Date”). The Merger shall become effective immediately upon the filing of such Certificate of Merger with the Delaware Secretary of State in substantially the form attached hereto as Exhibit B. The date and time on which the Merger shall become effective is referred to herein as the “Effective Time” or “Effective Date”.

Section 1.3 Subsequent Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm the Surviving Corporation’s right, title or interest in, to or under any of the rights, properties, privileges, franchises or assets of either of its constituent corporations acquired or to be acquired by the Surviving Corporation as a result of, or in connection with the Merger, or otherwise to carry out the intent of this Agreement, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of the Surviving Corporation, all such deeds, bills of sale, assignments and assurances and to take and do in the name and on behalf of each such corporation, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties, privileges, franchises or assets in the Surviving Corporation or otherwise to carry out the intent of this Agreement.

Diego – Merger Agreement Execution Copy

Section 1.4 Surviving Corporation; Articles of Incorporation; By-Laws; Officers; and Directors. Unless otherwise agreed to by PubCo and Diego prior to the Closing, at the Effective Time:

(a) the Articles of Incorporation of PubCo as in effect immediately prior to the Effective Time with such changes as shall be acceptable to Bio-En shall be, at and after the Effective Time, the Articles of Incorporation of the Surviving Corporation (the “Articles of Incorporation”) until further altered, amended or repealed in accordance with the Articles of Incorporation or applicable law;

(b) the by-laws of PubCo as in effect immediately prior to the Effective Time with such changes as shall be acceptable to Diego shall be, at and after the Effective Time, the by-laws of the Surviving Corporation until further altered, amended or repealed in accordance with the Articles of Incorporation, such by-laws or applicable law; and

(c) the officers and directors of the Surviving Corporation from and after the Effective Time shall be the officers and directors of PubCo immediately prior to the Effective Time.

ARTICLE II
CAPITAL STOCK

Section 2.1 Treatment of Capital Stock. The manner and basis of converting shares of Diego Common Stock by virtue of the Merger and without any action on the part of Diego and PubCo or any holder thereof, shall be as set forth in this Article II.

Section 2.2 Conversion of Diego Common Stock.

(a) At the Effective Time, each share of Diego Common Stock, Diego Series A Share, TMK Shares, and Diego Series B Share, issued and outstanding immediately prior to the Effective Time, the same as delineated on the attached Schedule 2.2, and all rights in respect thereof, shall forthwith cease to exist and shall be converted into the right to receive an aggregate of 20,144,469 shares of validly issued, fully paid and non-assessable shares of PubCo Common Stock (the “Issuable Shares”). At the Effective Time, each Diego A Warrant issued and outstanding immediately prior to the Effective Time, the same as delineated on the attached Schedule 2.2, and all rights in respect thereof, shall forthwith cease to exist and shall be converted into the right to receive an aggregate of $790,798 PubCo A Warrants (the “Issuable A Warrants”). At the Effective Time, each Diego B Warrant issued and outstanding immediately prior to the Effective Time, the same as delineated on the attached Schedule 2.2, and all rights in respect thereof, shall forthwith cease to exist and shall be converted into the right to receive an aggregate of $475,000 PubCo B Warrants (the “Issuable B Warrants” and, together with the Issuable A Warrants, the “Warrants” or “Issuable Warrants”). Each holder of a certificate representing any Diego Shares, Diego Warrants shall, to the extent such certificate or warrant represents such shares, cease to have any rights with respect to such shares, except the right to receive the Issuable Shares and Issuable Warrants allocable to the shares represented by such certificate upon surrender of such certificate in accordance with Section 2.3. Such Issuable Shares and Issuable Warrants shall be held in escrow by PubCo until the Closing Date (defined below) pending the completion of all conditions of closing set forth in Article V;

Diego – Merger Agreement Execution Copy

(b) Except as otherwise provided herein, commencing immediately after the Effective Time, each certificate (a “Certificate”) which, immediately prior to the Effective Time, represents issued and outstanding Diego Shares, shall evidence the right to receive shares of PubCo Common Stock on the basis set forth in Section 2.2(a). No fractional shares shall be issued and all fractional shares shall be rounded up to the next whole share.

(c) Except as otherwise provided herein, commencing immediately after the Effective Time, each Diego Warrant, shall evidence the right to receive PubCo Warrants on the basis set forth in Section 2.2(a). No fractional warrants shall be issued and all fractional warrants shall be rounded up to the next whole warrant.

Section 2.3 Exchange Procedures. If applicable, as soon as reasonably practicable after

the Effective Time, PubCo shall implement a process to mail to each record holder a certificate representing shares of PubCo Common Stock and PubCo Warrant as provided in this Article II.

Section 2.4 Transfer Books. The stock transfer books of Diego shall be closed at the Effective Time and no transfer of any Diego Shares will thereafter be recorded on any of such stock transfer books.

Section 2.5 Restricted Securities. The parties acknowledge and agree that there is only a limited market through the facilities of the National Quotation Bureau for the PubCo Common Stock, that the offers and issuance of shares of PubCo Common Stock under this Agreement has not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws and that such offer and issuance are being made in reliance upon exemptions from the registration all shares of PubCo Common Stock issued in connection with the Merger will be "restricted securities," as that term is defined in Rule 144 promulgated under the Securities Act, and all certificates representing shares of PubCo Common Stock will bear the following legend or other legend substantially similar:

“THESE SECUTRITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE “ACT”), HAVE BEEN OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTION SET FORTH IN SECTION 4(2) OF THE ACT AND UPON REGULATION D PROMULGATED THEREUNDER AND HAVE BEEN SOLD AS “RESTRICTED SECURITIES” AS SUCH ARE DEFINED UNDER THE ACT. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE CORPORATION ON THE OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT ANY SUCH TRANSFER WOULD NOT BE IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.”

Diego – Merger Agreement Execution Copy

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PUBCO

PubCo hereby represents and warrants, as of the date hereof and as of the Closing Date, to Diego as follows:

Section 3.1 Organization and Standing of PubCo. PubCo is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power to carry on its business as now conducted and to own its assets and is duly qualified to transact business as a foreign corporation in each state where such qualification is necessary. PubCo has no Subsidiaries and no interest in any other corporation, partnership, joint venture or other entity.

Section 3.2 Capitalization. The authorized capital stock of PubCo consists of 100,000,000 shares of capital stock, consisting of 95,000,000 shares of common stock, par value $0.000001 per share, and 5,000,000 shares of preferred stock, par value $0.000001. As of the Effective Date, there are 62,700,000 shares of common stock and no shares of preferred stock issued and outstanding. All issued and outstanding shares of common stock are duly authorized, validly issued, fully paid, and non-assessable, and were not issued in violation of any “Laws”, as hereinafter defined, or the pre-emptive rights of any Person. The PubCo Shares to be issued pursuant to this Agreement when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable, and will not be issued in violation of any Laws or the pre-emptive rights of any Person. There are no outstanding rights, subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options or other agreements (including shareholder agreements), of any kind relating to shares of PubCo Common Stock, or any other security of PubCo and there are no authorized or outstanding securities convertible into or exchangeable for any such PubCo Common Stock or other security of PubCo.

Section 3.3 Non-Reporting Company. PubCo is not a reporting company under the rules and regulations of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Section 3.4 Authorization: Validity. PubCo has the necessary corporate power to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by PubCo of this Agreement, the performance by PubCo of its obligations hereunder and the consummation by PubCo of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of PubCo. This Agreement has been duly executed and delivered by PubCo constitutes a valid and binding obligation of PubCo enforceable against each in accordance with the terms hereof, subject to the “Enforceability Exceptions”, as hereinafter defined.

Section 3.5 No Conflict: Required Filings and Consents. (a) The execution and delivery by PubCo of this Agreement does not, and the performance by PubCo of its respective obligations hereunder and the consummation by PubCo of the transactions contemplated hereby, will not: (i) violate or conflict with the certificate of incorporation or by-laws of PubCo; (ii) subject to obtaining or making the notices, reports, filings, waivers, consents, approvals or authorizations referred to in Section 3.5(b), conflict with or violate any law, regulation, court order, judgment or decree applicable to PubCo or any of its ‘Subsidiaries’, as hereinafter defined, or by which any of their respective assets or property is bound or subject; and/or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, cancellation, vesting, modification, alteration or acceleration of any obligation under, or result in the creation of a lien, claim or encumbrance on any of the properties or assets of PubCo pursuant to, or result in the loss of any benefit under (including an increase in the price paid by, or cost to, PubCo), or require the consent of any other party to, or result in any obligation on the part of PubCo to repurchase (with respect to a bond or a note), any agreement, contract, instrument, bond, note, indenture, permit, license or franchise to which PubCo is a party or by which PubCo, any of its Subsidiaries or any of their respective assets or properties are bound or subject.

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(b) PubCo is not required to submit any notice, report or other filing with any governmental entity in connection with the execution, delivery, performance or consummation of this Agreement or the Merger. Except as set forth in the immediately preceding sentence, no waiver, consent, approval or authorization of any governmental entity is required to be obtained by PubCo in connection with the execution, delivery, performance or consummation by it of this Agreement or any agreement or instrument or other document contemplated hereby or the transactions contemplated hereby or thereby.

Section 3.6 Full Disclosure. None of representations and warranties made by PubCo contains any untrue statement of a material fact, or omits any material fact the omission of which would be misleading under the circumstances by which it was made.

Section 3.7 Contract and Leases; Liabilities; Properties; Employees. Except as disclosed on Schedule 3.7, PubCo (i) has no assets; (ii) conducts no business; (iii) is not a party to any contract, agreement or lease; (iv) has no liabilities (absolute, accrued, contingent or otherwise); or (v) owns no property (real, personal or otherwise). No Person holds a power of attorney from PubCo.

Section 3.8 Compliance with Laws. To the best of its knowledge, PubCo has substantially complied with, and is not in material violation of any federal, state, or local statute, law, rule and/or regulation.

Section 3.9 Litigation. PubCo is not a party to any suit, action, arbitration, or legal, administrative, or other proceeding, or pending governmental investigation. To the best knowledge of PubCo, there is no basis for any such action or proceeding and no such action or proceeding is threatened against PubCo. PubCo is not subject to or in default with respect to any order, writ, injunction, or decree of any federal, state, local, or foreign court, department, agency or instrumentality.

Section 3.10 Delivery of Documents; Corporate Records. Diego has heretofore received true, correct and complete copies of all documents, instruments, agreements and records referred to in Article 3 of this Agreement and copies of the minute and stock record books of PubCo. The minute and stock record books of PubCo, in all material respects, contain true, correct and complete copies of the records of all meetings and consents in lieu of meetings of PubCo’s Board of Directors (and all committees thereof) and the shareholders since date of incorporation.

Section 3.11 Validity of Documents. All minutes, consents or other documents pertaining to PubCo to be delivered at or prior to closing shall be valid and in accordance with the applicable state law.

Section 3.12 Title to Shares. Except to any transferability restriction as required as under this Agreement and/or imposed under applicable securities laws, the PubCo Shares to be issued pursuant to this Agreement will be, at closing, free and clear of all liens, security interests, pledges, charges, claims, encumbrances and restrictions of any kind.

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Section 3.13 Board Action: Required Vote.

(a) PubCo’s Board of Directors has unanimously adopted (and not withdrawn) a resolution approving this Agreement, and the transactions contemplated hereby.

(b) The votes taken by PubCo referred to in paragraph (a) are the only votes required by holders of any class or series of PubCo capital stock required to approve this Agreement and the transactions contemplated hereby.

Section 3.14 Brokers. There is no broker, finder or investment banker or other Person entitled to any brokerage, finder’s, investment banking or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of PubCo.

Section 3.15 Taxes. (a) Except as Disclosed on Schedule 3.15, all Tax Returns, as hereinafter defined, required to be filed by PubCo on or prior to the Effective Time or with respect to taxable periods ending on or prior to the Effective Time have been or will be prepared in good faith and timely filed with the appropriate Governmental Entity on or prior to the Effective Time or by the due date thereof including extensions.

(b) All “Taxes”, as hereinafter defined, that are required to be paid have been or will be fully paid.

(c) PubCo has not waived any statute of limitations with respect to federal and state income Taxes or agreed to any extension of time with respect to federal income or state Tax assessment or deficiency.

(d) As of the date hereof, there are not pending or, to the knowledge of PubCo, threatened any audits, examinations, investigations or other proceedings in respect of matters of Tax that (i) were raised by any taxing authority in a written communication to PubCo or any thereof; and (ii) would, if determined adversely to PubCo, individually or in the aggregate, reasonably be expected to have an PubCo Material Adverse Effect.

(e) PubCo has made available to Diego true and correct copies of the United States federal income and all material state income or franchise Tax Returns filed by PubCo for each of its fiscal years ended 2012 and 2013.

Section 3.16 No Other Agreements to Sell. PubCo has no obligation, absolute or contingent, legally binding or otherwise to any other ‘Person’, as hereinafter defined, to sell any portion of its assets, to sell any portion of its capital stock or other ownership interests or to effect any merger, consolidation or other reorganization of itself or to enter into any agreement with respect thereto.

Section 3.18 PubCo Shareholders. PubCo has delivered to Diego a shareholder list prepared by its transfer agent, which, to PubCo’s knowledge, is a complete and accurate undated list setting forth the following information with respect to each Person who is a record holder of any PubCo Shares: (a) such Person’s name; and (b) the number of PubCo Shares held by such Person.

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Section 3.19 Government Consent. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority, instrumentality, agency or commission or any third party, including a party to any agreement with PubCo, is required by or with respect to PubCo in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable securities laws thereby, and (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DIEGO

Diego hereby represents and warrants, as of the date hereof and as of the Closing Date, to PubCo as follows:

Section 4.1 Organization. Diego is a corporation or other business entity duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, with all requisite corporate or other organizational power to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where the character of its properties owned, operated or leased or the nature of its business or activities makes such qualification necessary, in each case, except as would not, individually or in the aggregate, reasonably be expected to have a ‘Diego Material Adverse Effect’, as hereinafter defined.

Section 4.2 Authorization: Validity. The Board of Directors of Diego has determined that the Merger is advisable and in the best interests of the stockholders of Diego and, shall recommend that Diego’s stockholders vote to approve and adopt this Agreement. Diego has the necessary corporate power to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Diego, the performance by Diego of its obligations hereunder and the consummation by Diego of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Diego. This Agreement has been duly executed and delivered by Diego and, assuming the due authorization, execution and delivery by PubCo hereof, constitutes a valid and binding obligation of Diego enforceable against it in accordance with the terms hereof, subject to the Enforceability Exceptions.

Section 4.3 Capitalization. The authorized capital stock of Diego consists of 100,000,000 shares of capital stock, consisting of 87,000,000 shares of common stock, par value $0.0001 per share, and 13,000,000 shares of preferred stock (the “Diego Preferred Stock”), par value $0.0001 per share. As of the Effective Date, there are 14,590,038 shares of common issued and outstanding, 4,836,769 shares of Series A Preferred Stock issued and outstanding, and 666,667 shares of Series B Preferred Stock issued and outstanding. As of the Effective Date, there are an aggregate of $790,798 warrants to purchase shares of Series A Preferred Stock and an aggregate of $475,000 warrants shares of Series B Preferred Stock issued and outstanding. All issued and outstanding shares of common stock and shares of common stock underlying the Diego Preferred Stock and warrants are duly authorized, validly issued, fully paid, and non-assessable, and were not issued in violation of any Law, or the pre-emptive rights of any Person. There are no outstanding rights, subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options or other agreements (including shareholder agreements), of any kind relating to shares of Diego Common Stock, or any other security of Diego and there are no authorized or outstanding securities convertible into or exchangeable for any such Diego common stock or other security of Diego.

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Section 4.4 No Conflict: Required Filings and Consents. (a) The execution and delivery by Diego of this Agreement does not, and the performance by Diego of its obligations hereunder and the consummation by Diego of the transactions contemplated hereby will not: (i) subject to the adoption of this Agreement by Diego’s stockholders, violate or conflict with the Articles of Incorporation or by-laws of Diego; (ii) subject to obtaining or making the notices, reports, filings, waivers, consents, approvals or authorizations referred to in Section 4.4(b) below, conflict with or violate any law, regulation, court order, judgment or decree applicable to Diego or by which any of its assets or property is bound or subject; (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, cancellation, vesting, modification, alteration or acceleration of any obligation under, or result in the creation of a lien, claim or encumbrance on any of the properties or assets of Diego pursuant to, or result in the loss of any benefit under (including an increase in the price paid by, or cost to, Diego), or require the consent of any other party to, or result in any obligation on the part of Diego to repurchase (with respect to a bond or a note), any agreement, contract, instrument, bond, note, indenture, permit, license or franchise to which Diego is a party or by which Diego or any of its respective assets or properties are bound or subject.

Section 4.5 Full Disclosure. None of representations and warranties made by Diego contains any untrue statement of a material fact, or omits any material fact the omission of which would be misleading under the circumstances by which it was made.

Section 4.6 Brokers. There is no broker, finder or investment banker or other Person entitled to any brokerage, finder’s, investment banking or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Diego.

Section 4.7 Compliance With Law. Except as otherwise disclosed, Diego materially complies with material Laws applicable to it.

Section 4.8 Litigation. Except as disclosed on Schedule 4.8, Diego is not a party to any suit, action, arbitration, or legal, administrative, or other proceeding, or pending governmental investigation. To the best knowledge of Diego, there is no basis for any such action or proceeding and no such action or proceeding is threatened against Diego. Diego is not subject to or in default with respect to any order, writ, injunction, or decree of any federal, state, local, or foreign court, department, agency or instrumentality.

Section 4.9 Diego Shareholders. Diego on or before the Effective Date shall deliver to PubCo a complete and accurate list setting forth the following information with respect to each Person who is a holder of any Diego Shares: (a) such Person’s name; and (b) the number of Diego Shares held by such Person.

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Section 4.10 Government Consent. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other federal, state, county, local or other foreign governmental authority, instrumentality, agency or commission or any third party, including a party to any agreement with Diego, is required by or with respect to Diego in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable securities laws thereby, and (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware.

Section 4.11 Restrictions on Business Activities. There is no agreement (non-compete or otherwise), commitment, judgment, injunction, order or decree to which Diego is a party or otherwise binding upon Diego which has or may have the effect of prohibiting or impairing any business practice of Diego, any acquisition of property (tangible or intangible) by Diego or the conduct of business by Diego. Without limiting the foregoing, Diego has not entered into any agreement under which Diego is restricted from selling, licensing or otherwise distributing any of its technology or products to or providing services to, customers or potential customers or any class of customers, in any geographic area, during any period of time or in any segment of the market.

Section 4.12 No Undisclosed Liabilities. Except as previously disclosed, there are no liabilities or debts of Diego of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability or debt.

Section 4.13 Material Contracts. Except as a previously disclosed, Diego’s Material Contracts are enforceable in accordance with their respective terms, and to the knowledge of Diego, Diego is not in violation of, and has received no notice of being in violation of such Material Contracts.

Section 4.14. Taxes. (a) All Tax Returns required to be filed by Diego on or prior to the Effective Time or with respect to taxable periods ending on or prior to the Effective Time have been or will be prepared in good faith and timely filed with the appropriate Governmental Entity on or prior to the Effective Time or by the due date thereof including extensions.

(b) All “Taxes”, as hereinafter defined, that are required to be paid have been or will be fully paid.

(c) Diego has not waived any statute of limitations with respect to federal and state income Taxes or agreed to any extension of time with respect to federal income or state Tax assessment or deficiency.

(d) As of the date hereof, there are not pending or, to the knowledge of PubCo, threatened any audits, examinations, investigations or other proceedings in respect of matters of Tax that (i) were raised by any taxing authority in a written communication to Diego or any thereof; and (ii) would, if determined adversely to PubCo, individually or in the aggregate, reasonably be expected to have an Diego Material Adverse Effect.

(e) Diego has made available to PubCo true and correct copies of the United States federal income and all material state income or franchise Tax Returns filed by Diego and its Subsidiaries for each of its fiscal year ended 2013.

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ARTICLE V
CONDITIONS TO CLOSING

Section 5.1 Financial Statements. This Agreement shall become effective as of such date and time as when PubCo shall have received copies of (i) audited financial statements for Diego for its most recently ended fiscal year, or such shorter period if agreed by the parties, and (ii) unaudited quarterly financial statements for Diego for the quarter ended following the completion of its most recent fiscal year, the same to be included with PubCo's expected Current Report Form 8-K to be filed with the Securities and Exchange Commission.

ARTICLE VI
CONDUCT PENDING THE MERGER

Section 6.1 Stockholder Approval. Diego and PubCo shall seek to secure from their stockholders approval pursuant to the written consent of the holders of such number of shares as may be permitted for the approval of a transaction of the type provided for herein, and shall further promptly comply with such notice requirements to the remaining shareholders.

Section 6.2 Operations of PubCo. (a) PubCo covenants for itself that, after the date hereof and prior to the Effective Time (unless Diego shall otherwise approve in writing or required by applicable law) PubCo shall not:

(i) conduct any business;

(ii) (A) except as previously disclosed, amend its certificate of incorporation or by-laws, or adopt any stockholders’ rights plan or enter into any agreement with any of its stockholders in their capacity as such, (B) split, combine, subdivide or reclassify its outstanding shares of its capital, (C) declare, set aside, make or pay any dividend or distribution payable in cash, stock or property in respect of any of its capital stock, or, (D) repurchase, redeem or otherwise acquire to purchase, redeem or otherwise acquire, any shares of its capital stock;

(iii) take or fail to take any action that would (A) prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368 of the Code, or (B) cause any of its representations and warranties herein to become inaccurate or misleading in any material respect;

(iv) except as expressly contemplated by this Agreement issue, deliver, sell or encumber shares of any class of its capital stock or any securities convertible into, or any rights, warrants or options to acquire, any such shares;

(v) acquire or make any investment in any business or other Person, whether by merger, consolidation, purchase of property or assets or otherwise; and/or,

(vi) except as previously disclosed, enter into any commitments or agreements to do any business or other Person, whether by merger, consolidation, purchase of property or assets or otherwise;

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(b) From the date hereof through the Closing Date, PubCo shall promptly notify Diego of any investigations of which PubCo has knowledge or any claims which, after the date hereof, are commenced or threatened against PubCo, thereof or any of the properties or assets of PubCo, or any officer, director or employee of PubCo arising out of or relating to the affairs or conduct of the business of PubCo.

(c) Diego and its employees, independent accountants, attorneys, agents and authorized representatives shall have reasonable opportunity and access during normal business hours to the plants, properties, documents, files, books and records of PubCo, and shall be provided with such information as to the business, properties and assets of PubCo as Diego may from time to time reasonably request to update Diego with respect to events occurring after the date hereof.

ARTICLE VII
ADDITIONAL AGREEMENTS

Section 7.1 Publicity. No Party shall issue any press release or otherwise make any public statements with respect to the Merger without the prior consent of the other Party.

Section 7.2 Further Actions. Each of the Parties shall, subject to the fulfillment at or before the Effective Time of each of the conditions of performance set forth herein or the waiver thereof, use its reasonable best efforts: (a) to perform such further acts and execute such documents as may be reasonably required to: (i) effect the transactions contemplated hereby, (ii) obtain in a timely manner all necessary waivers, consents and approvals, and (iii) effect all necessary registrations and filings; and, (b) to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the Merger.

Section 7.3 Expenses. Whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, shall be paid by the Party incurring such expenses.

Section 7.4 Notification of Certain Matters. Each Party shall give prompt notice to the other Party(ies) of the following:

(a) the occurrence or nonoccurrence of any event whose occurrence or nonoccurrence is reasonably expected to cause not to be satisfied any of the conditions precedent set forth in Article VII; and,

(b) the status of matters relating to the completion of the Merger, including promptly furnishing the other Party with copies of notices or other communications received by such notifying Party from any third party and/or Governmental Entity with respect to this Agreement or the transactions contemplated hereby, including the Merger.

Section 7.5 Review of Information. Subject to applicable laws relating to the exchange of information, each Party shall have the right to review in advance, and to the extent practicable, each will consult with the other about all information relating to that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Merger. In exercising the foregoing right, each of the Parties shall act reasonably and as promptly as practicable.

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Section 7.6 Indemnification. From and after the Effective Time, PubCo shall, or shall cause the Surviving Corporation to, defend, indemnify and hold harmless each present and former director and officer of Diego (to the extent such Person is or was acting in such capacity) (the “Indemnified Parties”), against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, for acts or omissions existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under applicable law. The provisions of this Section 6.6 are intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Parties, their heirs and their representatives.

Section 7.7 Tax-Free Reorganization. Each of the Parties will use its reasonable best efforts to cause the Merger to qualify as a tax-free “reorganization” under Section 368 of the Code.

Section 7.9 Regulation D. From and after the Effective Time, PubCo shall comply with the requirements of Regulation D under the Securities Act and state securities laws.

ARTICLE VIII
CONDITIONS TO THE MERGER

Section 8.1 Conditions to the Obligations of the Parties to Consummate the Merger. The respective obligation of each Party to consummate the Merger shall be subject to the satisfaction of each of the following conditions:

(a) No order, decree or injunction shall have been entered or issued by any Governmental Entity which shall be in effect and shall have the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger. Each Party agrees that, in the event that any such order, decree or injunction shall be entered or issued, it shall use its reasonable best efforts to cause the same to be lifted or vacated.

Section 8.2 Additional Conditions to the Obligations of PubCo. The obligations of PubCo to consummate the Merger shall also be subject to the satisfaction or waiver of each of the following conditions:

(a) Representations and Warranties. The representations and warranties of Diego contained in this Agreement (without giving effect in any such representation or warranty to any materiality or the Diego Material Adverse Effect standard, qualification or exception contained therein) shall be true at and as of the Closing Date with the same effect as though made at and as of such time (except for representations and warranties which speak as of a different date, which shall be true as of such date).

(b) Agreements and Covenants. Diego shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or before the Effective Time.

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(c) Consents. Diego shall have obtained all consents, approvals, releases or authorizations from, and Diego shall have made all filings and registrations to or with, any Person, including without limitation any Governmental Entity, necessary to be obtained or made by Diego in order for Diego to consummate the Merger, unless the failure to obtain any of such consents, approvals, releases or authorizations or make any such filings or registrations would not, individually or in the aggregate, reasonably be expected to have a Diego Material Adverse Effect.

(d) No Material Adverse Change. Since the date of this Agreement, no change or circumstance resulting in a Bio-E Material Adverse Effect shall have occurred.

(e) Stockholder Adoption/Approval. The requisite holders of the stock of Diego shall have voted to adopt this Agreement in accordance and such adoption shall have been certified by the Secretary or Assistant Secretary of Diego.

(f) Certificate of Good Standing. Diego shall have delivered to PubCo a certificate as to the good standing of Diego in the State of Delaware certified by the Secretary of State of the State of Delaware on or within 20 calendar days of the Closing Date. PubCo shall have delivered to Diego a certificate as to the good standing of PubCo in the State of Delaware certified by the Secretary of State of the State of Delaware on or within 20 calendar days of the Closing Date

Section 8.3 Additional Conditions to the Obligations of Diego. The obligations of Diego to consummate the Merger shall also be subject to the satisfaction or waiver of each of the following conditions:

(a) Representations and Warranties. The representations and warranties of PubCo contained in this Agreement shall be true at and as of the Closing Date with the same effect as though made at and as of such time.

(b) Agreements and Covenants. PubCo shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date.

(c) Consents. PubCo shall have obtained all consents, approvals, releases or authorizations from, and PubCo shall have made all filings and registrations to or with, any Person, including without limitation any Governmental Entity, necessary to be obtained or made by PubCo in order for PubCo to consummate the Merger, unless the failure to obtain any such consents, approvals, releases or authorizations or make any such filings or registrations would not, individually or in the aggregate, be reasonably expected to have a PubCo Material Adverse Effect.

(d) No Material Adverse Change. Since the date of this Agreement, no change or circumstance resulting in PubCo Material Adverse Effect shall have occurred.

(e) Certificate of Good Standing. PubCo shall have delivered to Diego a certificate as to the good standing of PubCo in the State of Delaware certified by the Secretary of State of the State of Delaware on or within 20 calendar days of the Closing Date.

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ARTICLE IX
TERMINATION AND AMENDMENT

Section 9.1 Termination. This Agreement may be terminated at any time before the Effective Time (except as otherwise provided) as follows:

(a) by mutual written consent of the Parties;

(b) by either Party, if a Governmental Entity shall have issued an order, decree or injunction having the effect of making the Merger illegal or permanently prohibiting the consummation of the Merger, and such order, decree or injunction shall have become final and non-appealable (but only if such Party shall have used its reasonable best efforts to cause such order, decree or injunction to be lifted or vacated); and

(c) by either Party, if (x) there shall have been a material breach by the other Party of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would result in the failure to satisfy one or more of the conditions set forth in Section 7.2(a) or (b) (in the case of a breach by Diego) or Section 7.3(a) or (b) (in the case of a breach by PubCo), and (y) such breach shall be incapable of being cured or, if capable of being cured, shall not have been cured immediately upon the receipt by the Party alleged to be in breach of written notice thereof.

Section 9.2 Effect of Termination and Abandonment. In the event of the termination of this Agreement pursuant to this Article VIII, this Agreement shall become void and of no effect with no liability on the part of any Party (or of any of its Representatives); provided, however, that (i) no such termination shall relieve any Party from any liability for damages resulting from any willful and intentional breach of this Agreement, and (ii) this Article VIII, Sections shall survive such termination.

Section 9.3 Amendment. This Agreement may be amended at any time before the Effective Time, but only pursuant to a writing executed and delivered by all Parties.

ARTICLE X
GENERAL PROVISIONS

Section 10.1 Survival of Representations, Warranties and Agreements. The representations, warranties, covenants and agreements shall survive the Effective Date.

Section 10.2 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date of receipt and shall be delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested), sent by overnight courier, sent by email, or sent by telecopy, to the applicable Party at the following addresses or telecopy numbers (or at such other address or telecopy number for a Party as shall be specified by like notice):

(a)

if to PubCo:

Diego Pellicer Worldwide, Inc. (f/k/a Type 1 Media, Inc.)

c/o Szaferman Lakind Blumstein & Blader, PC
101 Grovers Mill Road, Second Floor
Lawrenceville, NJ 08648
Fax: 609-557-0969

Email: gjaclin@szaferman.com Attn.: Gregg Jaclin, Esq.

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	(b)	if to Diego:	Diego Pellicer World-wide 1, Inc.
			c/o Szaferman Lakind Blumstein & Blader, PC 101 Grovers Mill Road, Second Floor Lawrenceville, NJ 08648 Fax: 609-557-0969 Email: gjaclin@szaferman.com Attn.: Gregg Jaclin, Esq.

Section 10.3 Certain Definitions: Interpretation. (a) For purposes of this Agreement, the following terms shall have the following meanings:

“Diego Material Adverse Effect” means any material adverse change in or material adverse effect (x) on the business, results of operations, financial condition or prospects of Diego (or its successor), or (y) that will prevent or materially impair Diego’s ability to consummate the Merger.

"PubCo Material Adverse Effect” means (x) a material change in liability or (y) that will prevent or materially impair PubCo’s ability to consummate the Merger or the issuance by PubCo of shares of PubCo Common Stock in accordance with the terms hereof.

“C(c)ontract” shall mean any agreement, contract, license, indenture, lease, mortgage, license, plan, arrangement, commitment or instrument including any note or other debt instrument (whether written or oral).

“C(c)onsents” shall refer to the consents or approval of any third party including any governmental agency or registered securities association required in connection with the Merger.

“Enforceability Exceptions” shall mean the extent to which enforceability of an obligation may be limited by applicable bankruptcy, insolvency, re-organization or other similar laws affecting the enforcement of creditors’ rights generally and by principles of equity regarding the availability of remedies.

“GAAP” shall refer to generally accepted accounting principles as applicable in the United States.

“Governmental Entity” shall mean braches, departments and agencies (and subunits theref) of the federal, state and local government created by federal or state statutes, federal or state executive orders, or local ordinances or resolutions.

“K(k)nowledge” shall mean with respect to a party's awareness of the presence or absence of a fact, event or condition (a) actual knowledge plus, if different, (b) the knowledge that would be obtained if such party conducted itself faithfully and exercised a sound discretion in the management of his own affairs.

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“L(l)aws” shall mean all laws, common laws, rules, regulations, ordinances, codes, judgments, injunctions, orders, decrees, permits, policies and other requirements of the United States and other jurisdictions to which a party, is subject, including all foreign and local governments and all agencies and instrumentalities thereof, including any administrative agencies or administrative body created by any such government.

“L(l)iabilities” shall mean any indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind required by generally accepted accounting principles to be set forth on a financial statement including the notes thereto.

“L(l)ien” means any mortgage, pledge, lien, encumbrance, charge, adverse claim or restriction of any kind affecting title or resulting in an encumbrance against property, real or personal, tangible or intangible, or a security interest of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, any third party option or other agreement to sell and any filing of or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statute) of any jurisdiction).

“P(p)erson(s)” means an individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization, entity or group (as defined in the Securities Exchange Act of 1934, as amended).

“Subsidiary(ies)” of a Person means any corporation or other legal entity (A) which is directly or indirectly owned or controlled by such Person (either alone or through or together with any other Subsidiary or Subsidiaries), and (B) of which such Person (either alone or through or together with any other Subsidiary or Subsidiaries) (x) is the general partner or managing entity or (y) controls, directly or indirectly, at least a majority of the stock or other equity interests which are generally entitled to be voted by the holders thereof for the election of the board of directors (or others performing similar functions of such corporation or other legal entity).

“Taxes” shall mean any income, alternative or add-on minimum, business, employment, franchise, occupancy, payroll, property, sales, transfer, use, value added, withholding or other tax, levy, impost, fee, imposition, assessment or similar charge together with any related addition to tax, interest, penalty or fine thereon.

“Tax Returns” means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns or statements required to be supplied to a governmental authority in connection with Taxes, including any schedule or attachment thereto or amendment thereof.

(b) When a reference is made in this Agreement to Articles, Sections, or Exhibits, such reference is to an Article or a Section of, or an Exhibit to, this Agreement, unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be understood to be followed by the words “without limitation.”

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Section 10.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 10.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to affect the original intent of the Parties as closely as possible such that the transactions contemplated hereby are fulfilled to the maximum extent possible.

Section 10.6 Entire Agreement: No Third-Party Beneficiaries. This Agreement, together with the Exhibits and Schedules, constitutes the entire agreement and supersedes any and all other prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof and, except for Section 6.6 (Indemnification) does not, and is not intended to, confer upon any Person other than the parties hereto any rights of remedies hereunder.

Section 10.7 Assignment. This Agreement shall not be assigned by any Party by operation of law or otherwise without the express written consent of each of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective permitted successors and assigns.

Section 10.8 Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, INCLUDING LAWS RELATING TO THE VALIDITY, INTERPRETATION AND EFFECT OF THIS AGREEMENT, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF THE STATE OF DELAWARE AND/OR THE STATE OF NEW YORK SHALL SPECIFICALLY AND MANDATORILY APPLY TO THE MERGER AND THE RIGHTS OF STOCKHOLDERS INCIDENTAL THERETO.

(b) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATES OF NEW YORK AND THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE CITY OF NEW YORK, FOR ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MERGER OR ANY OF THE OTHER TRANSACTION CONTEMPLATED HEREBY. EACH PARTY AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH COURTS REFERENCED ABOVE, AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 10.2 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE IN THE ABOVE REFERENCED COURTS.

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(c) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MERGER OR ANY OF THE OTHER TRANSACTIONS CONTEMPLATED HEREBY.

Section 10.10 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which shall constitute one and the same agreement.

Section 10.11 Exclusivity. Except for the transactions contemplated by this Agreement, none of the Parties shall (i) solicit, initiate, or encourage the submission of any proposal or offer relating to the acquisition of any capital stock or other voting securities or any substantial portion of the assets of such or any other Party hereto (including any acquisition structured as a merger, consolidation, or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. The Parties shall notify each other Party immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

Section 10.12 Diego Operations.

(a) As part of the transaction herein. PubCo shall assume from Diego the following assets, which shall hereinafter collectively be designated the "Assets":

(i) Proprietary Rights - Any and all of the following used by Diego in connection with Diego’s business, including:

(A) production operations and processes, trade secrets, know-how and confidential, information, customer lists and information;

(B) logos, trade dress (including, without limitation, configuration, design and packaging), goodwill, rights of publicity and privacy (including, without limitation, photographic and other releases, whether published or unpublished), marketing rights, and any similar rights, together with the goodwill of the Diego Business associated therewith and/or symbolized thereby;

(C) other intellectual property, intangible industrial property and proprietary rights, titles, interests and privileges, however designated, that are similar or analogous to any of the foregoing including, without limitation any and all rights in and to product configurations and designs, label, designs, graphic and artistic designs; artwork; dyes; character; rights; and UPC bar codes;

(D) registrations, applications, renewals, and extensions with respect to each of the foregoing now or hereafter in force, in whole and/or in part;

(E) rights of possession, ownership, use and enjoyment with respect to each of the foregoing, including, without limitation, the right to license, sublicense, assign, pledge sell, transfer, convey, grant, gift over, divide, partition or use (or not use) in any way any of the foregoing now or hereafter (including without limitation any claims, demands or causes of action of any kind with respect thereto);

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(F) Diego’s customers, and their related information;

(G) all books and records relating to the Assets;

(H) claims, demands and causes of action of any kind with respect to, and any and all other rights relating to the enforcement of, any of the foregoing, including, without limitation, any claims, demands or causes of action for any infringement, conversion, misappropriation, dilution or other violation of or injury to any of them.

Each and all of the foregoing being hereinafter referred to collectively as the "Proprietary Rights." To the extent, if any, that any rights of Diego or of the author of any work encompassed by the Proprietary Rights cannot be legally transferred by Diego, they shall be waived in a signed writing providing for same;

(b) Diego shall execute and deliver to PubCo such other documents as may be reasonably required by PubCo to evidence PubCo’s assumption of the Assets.

10.13 Share Cancellation. Purchase and Sale. Simultaneously, at the Effective Time the PubCo Principal Shareholder, owning an aggregate of 55,000,000 shares of PubCo’s common stock shall cancel the 55,000,000 shares pursuant to the Cancellation Agreement in exchange for an aggregate cancellation price of $169,000.

[SIGNATURE PAGE TO FOLLOW IMMEDIATELY]

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IN WITNESS WHEREOF, the Parties hereto have executed this instrument the date first above written.

	DIEGO PELLICER WORLD-WIDE 1, INC.

	By:	/s/ Philip Gay
	Name:	Philip Gay
	Title:	Chief Executive Officer

	DIEGO PELLICER WORLDWIDE, INC. (f/k/a TYPE 1 MEDIA, INC.)

	By:
	Name:	Jonathan White
	Title:	President

	B:
		JONATHAN WHITE, Individually

The rest of this page is left intentionally blank.

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IN WITNESS WHEREOF, the Parties hereto have executed this instrument the date first above written.

	DIEGO PELLICER WORLD-WIDE 1, INC.

	By:
	Name:	Philip Gay
	Title:	Chief Executive Officer

	DIEGO PELLICER WORLDWIDE, INC. (f/k/a TYPE 1 MEDIA, INC.)

	By:	/s/ Jonathan White
	Name:	Jonathan White
	Title:	President

	B:	/s/ Jonathan White
		JONATHAN WHITE, Individually

The rest of this page is left intentionally blank.

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SCHEDULES

Schedule 2.2 Diego Shareholders

Common Stock Holder	Number of Shares of Diego Common Stock		Number of Shares of PubCo Common Stock to be Issued
WSCP		7,020,000		7,020,000
D. Anderson		5,941,800		5,941,800
W. Gosnell		192,000		192,000
Nick & Barbara Cerwin		80,000		80,000
Christine Becker		20,000		20,000
Robert & Kristen Lanigan		20,000		20,000
John Davis		51,000		51,000
Povilos Stravinski		7,000		7,000
Louis Moore		2,000		2,000
Company/Treasury		58,200		58,200
M. Gosnell		64,000		64,000
C. Gosnell		64,000		64,000
Total		13,520,000		13,520,000

Diego Series A Holder	Number of Shares of Diego Series A Stock		Number of Shares of PubCo Common Stock to be Issued
J Murphy		35,733		36,846
Close Trust		53,400		55,063
M Gunn		53,333		54,995
Greener Investments LLC		40,000		41,246
G Thrall		26,666		27,497
B Heimann		26,666		27,497
G Sickler		26,666		27,497
Basalt Investments, LLC		106,000		109,302
D Koweleski		29,866		30,797
D Primbs		27,224		28,073
J Maguire		53,333		54,995
M Gothberg		27,242		28,091
M Osgood		5,436		5,605
W Primbs		44,778		46,173
A Goltzman		5,333		5,499
K Khan		26,700		27,531
D Youngwall		53,333		54,995
A Goltzman		5,333		5,499
J Rosenthal		26,666		27,497
D & J Jasura		26,666		27,497
T Huesers		26,666		27,497
M Karukin		26,666		27,497
T Mangurian		22,400		23,097
TMK Holdings LLC		3,200,000		3,200,000
JDF Capital		106,666		109,990
M Hemenway		160,000		164,985
J Fink		100,000		103,115

M Hemenway	53,333	54,995
R Drake	26,666	27,497
L Drake	26,666	27,497
A Verglay	266,666	274,975
R Neubauer	30,000	30,934
A Blum	26,666	27,497
M Siebert	32,000	32,997
D Sullivan	32,000	32,997
TOTAL	4,836,769	4,887,765

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Schedule 2.2

Diego Series B Holder	Number of Shares of Diego Series B Stock		Number of Shares of PubCo Common Stock to be Issued
Aureis (Anaford)		200,000		200,000
Compasss Ventures		466,666		466,666
Total		666,666		666,666

Diego WA Conversion Common Stock	Number of Shares of Diego Common Stock		Number of Shares of PubCo Common Stock to be Issued
Jamen Shively		44,528		44,528
Randy Aliment		89,056		89,056
James Kossert		89,056		89,056
Kazuaki (Butch)		55,268		55,268
Sugiyama		33,150		33,150
Thaddeus Dancer		276,055		276,055
Tiberius Group		5,508		5,508
Brad Blake		16,526		16,526
Lauri Sikler-Tock		27,473		27,473
Marianne		27,254		27,254
Maksirisonbat		27,231		27,231
Elena Byrne		54,462		54,462
Ethan Crawford		108,902		108,902
Gracie Close		108,902		108,902
Eli Hastings
Casey Hastings		963,371		963,371
Subtotal

Series A		26,667		26,667
Julie Evans Reid		53,333		53,333
John Charles Russell		26,667		26,667

Jason & Kirsten L. Russell	106,667	106,667
Subtotal

Total DPWW Shares	1,070,038	1,070,038

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Diego Series B Warrant Holder	Value of Diego B Warrant Held		Value of PubCo B Warrant to be Issued
Larry Wiebe		125,000		125,000
Doug Froese		125,000		125,000
Chester Aldridge		125,000		125,000
Merriman		100,000		100,000
Total		475,000		475,000

Diego series A Warrant Holder (@$1.40)	Value of Diego A Warrant Held		Value of PubCo A Warrant to be Issued
M Hemenway		32,000		32,000
J Fink		20,000		20,000
M Hemenway		10,666		10,666
R Drake		5,333		5,333
L Drake		5,333		5,333
A Verglay		53,333		53,333
R Neubauer		6,000		6,000
A Blum		5,333		5,333
M Siebert		6,400		6,400
D Sullivan		6,400		6,400
		150,798		150,798

Diego Series A Warrant Holder (@1.24)		Value of Diego B Warrant Held				Value of PubCo B Warrant to be Issued
TMK Holdings LLC			640,000				640,000

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	Value of		Value of
	Option/		Option/
Diego Warrant/Option Holder	Warrant Held		Warrant to be Issued
Philip Gay/Rick Demarco/Don Fitzgerald		200,000		200,000
Greg Reid
Ron Throgmartin		600,000		600,000
Dr. Robert Epstein		250,000		250,000
Jon Fink		50,000		50,000
Dr. Michael Osborne		50,000		50,000
Steve Norris		50,000		50,000

Jean Marie Auboines	50,000	50,000
Carolyn Gang	50,000	50,000
Greg Quist	50,000	50,000
Gregg Jaclin	25,000	25,000
Dr. Michael Toney	15,000	15,000
Turabi Topal	10,000	10,000
Mike Smith	3,000	3,000
Gino Rodrigues	2,000	2,000
Anthony Vaz	10,000	10,000
Mark Moscowitz	15,000	15,000
Total	25,000	25,000
	1,455,000	1,455,000

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Schedule 3.7 Contract and Leases; Liabilities; Properties; Employees (PubCo)

The remaining assets of the company are as follows:

An account at Bank of America account with less than $1,000

Minimal production equipment

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Schedule 3.15 Taxes (PubCo)

Taxes have been completed for 2012 and 2013 in both the United States and Canada. PubCo expects to be filing should be filing 2014 United State taxes by March 12, 2015 and the 2014 Canadian taxes by March 31, 2015.

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Schedule 4.8 Litigation (Diego)

The Company believes that it has complied fully with all applicable laws, rules and regulations, and intends to cooperate fully with the government’s investigation.

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EXHIBIT A

CANCELLATION AGREEMENT

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EXHIBIT B

CERTIFICATE OF MERGER

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EXHIBIT C

FORM OF PUBCO A WARRANT

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EXHIBIT D

FORM OF PUBCO B WARRANT

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Exhibit 3.1

Delaware

PAGE 1

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF "DIEGO PELLICER WORLDWIDE INC.", FILED IN THIS OFFICE ON THE TWENTY-FOURTH DAY OF SEPTEMBER, A.D. 2013, AT 1:19 O'CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

/s/ Jeffrey W. Bullock

5389014 8100

131121583

You may verify this certificate online
at corp.delaware.gov/authver.shtml

Jeffrey W. Bullock, Secretary of State

AUTHENTICATION: 0760874

DATE: 09-24-13

*State of Delaware*
*Secretary of State*
*Division of Corporations*
*Delivered 01:54 PM 09/24/2013*
*FILED 01:19 PM 09/24/2013*
*SRV 131121583 - 5389014 FILE*

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

DIEGO PELLICER WORLDWIDE INC.

Diego Pellicer Worldwide Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation"), certifies that:

1. The name of the Corporation is Diego Pellicer Worldwide Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on August 26, 2013.

2. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.

3. The text of the Certificate of Incorporation is amended and restated to read as set forth in EXHIBIT A attached hereto.

IN WITNESS WHEREOF, Diego Pellicer Worldwide Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by Ron Throgmartin, a duly authorized officer of the Corporation, on September 23, 2013.

/s/ Ron Throgmartin

Ron Throgmartin,

Chief Executive Officer

EXHIBIT A

ARTICLE I

The name of the Corporation is Diego Pellicer Worldwide Inc.

ARTICLE II

The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE III

The address of the Corporation's registered office in the State of Delaware 2711 Centerville Road, Suite 400, New Castle County, Wilmington, DE 19808. The name of the registered agent at such address is Corporation Service Company.

ARTICLE IV

The total number of shares of stock that the corporation shall have authority to issue is 100,000,000, consisting of 87,000,000 shares of Common Stock, $0.0001 par value per share, and 13,000,000 shares of Preferred Stock, $0.0001 par value per share. The first series of Preferred Stock shall be designated "Series A Preferred Stock" and shall consist of 13,000,000 shares.

ARTICLE V

The terms and provisions of the Common Stock and Preferred Stock are as follows:

1. Definitions. For purposes of this ARTICLE V, the following definitions shall apply:

(a) "Board of Directors" shall mean the board of directors of the Corporation.

(b) "Conversion Price" shall mean $0.9375 per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations and as otherwise set forth elsewhere herein).

(c) "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock.

(d) "Corporation" shall mean Diego Pellicer Worldwide Inc.

(e) "Distribution" shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise, other than dividends on Common Stock payable in Common Stock, or the purchase or redemption of shares of the Corporation by the Corporation for cash or property other than: (i) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchase of capital stock of the Corporation in connection with the settlement of disputes with any stockholder, and (iv) any other repurchase or redemption of capital stock of the Corporation approved by the holders of the Common and Preferred Stock of the Corporation voting as separate classes.

(f) "Liquidation Preference" shall mean $0.9375 per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

(g) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(h) "Original Issue Price" shall mean $0,9375 per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

(i) "Original Issue Date" shall mean the date on which the first share of Series A Preferred Stock was issued.

(j) "Preferred Stock" shall mean the Series A Preferred Stock.

(k) "Recapitalization" shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.

2. Dividends.

(a) Preferred Stock. In any calendar year, the holders of outstanding shares of Preferred Stock shall be entitled to receive dividends, when, as and if declared by the Board of Directors, out of any assets at the time legally available therefor, payable in preference and priority to any declaration or payment of any Distribution on the Common Stock in such calendar year, No Distributions shall be made with respect to the Common Stock unless dividends of an equal amount per share on the Preferred Stock have been declared and paid or set aside for payment to the Preferred Stock holders. The right to receive dividends on shares of Preferred Stock shall not be cumulative, and no right to dividends shall accrue to holders of Preferred Stock by reason of the fact that dividends on said shares are not declared or paid.

(b) Common Stock. Dividends may be paid on the Common Stock when, as and if declared by the Board of Directors, subject to the prior dividend rights of the Preferred Stock and to Section 6.

(c) Non-Cash Distributions. Whenever a Distribution provided for in this Section 2 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors.

(d) Waiver of Dividends. Any dividend preference of any series of Preferred Stock may be waived, in whole or in part, by the consent or vote of the holders of the majority of the outstanding shares of such series.

3. Liquidation Rights.

(a) Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Preferred Stock shall he entitled to receive, prior and in preference to any Distribution of any of the assets of the Corporation to the holders of the Common Stock by reason of their ownership of such stock, an amount per share for each share of Preferred Stock held by them equal to the sum of (i) the Liquidation Preference specified for such share of Preferred Stock and (ii) all declared but unpaid dividends (if any) on such share of Preferred Stock, or such lesser amount as may be approved by the holders of the majority of the outstanding shares of Preferred Stock. If upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Preferred Stock are insufficient to permit the payment to such holders of the full amounts specified in this Section 3(a), then the entire assets of the Corporation legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section 3(a).

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(b) Remaining Assets. After the payment or setting aside for payment to the holders of Preferred Stock of the full amounts specified in Section 3(a), the entire remaining assets of the Corporation legally available for distribution shall be distributed pro rata to holders of the Common Stock of the Corporation in proportion to the number of shares of Common Stock held by them.

(c) Shares not Treated as Both Preferred Stock and Common Stock in any Distribution. Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in order to participate in any Distribution, or series of Distributions, as shares of Common Stock, without first foregoing participation in the Distribution, or series of Distributions, as shares of Preferred Stock.

(d) Reorganization. For purposes of this Section 3, a liquidation, dissolution or winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions to which the Corporation is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of related transactions in which the holders of the voting securities of the Corporation outstanding immediately prior to such transaction or series of related transactions retain, .immediately after such transaction or series of related transactions, as a result of shares in the Corporation held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Corporation or such other surviving or resulting entity (or if the Corporation or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); (ii) a sale, lease or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Corporation; or (iii) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. The treatment ^-of any transaction or series of related transactions as a liquidation, dissolution or winding up pursuant to clause (i) or (ii) of the preceding sentence may be waived by the consent or vote of a majority of the outstanding Preferred Stock (voting as a single class and on an as-converted basis).

(e) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors, except that any publicly-traded securities to be distributed to stockholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as follows:

(i) if the securities are then traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange over the ten (10) trading day period ending five (5) trading days prior to the Distribution;

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(ii) if the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the Distribution.

In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.

For the purposes of this subsection 3(e), "trading day" shall mean any day which the exchange or system on which the securities to be distributed are traded is open and "closing prices" or "closing bid prices" shall be deemed to be: (i) for securities traded primarily on the New York Stock Exchange, the American Stock Exchange or a Nasdaq market, the last reported trade price or sale price, as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or traded on other exchanges, markets and systems, the market price as of the end of the regular hours trading period that is generally accepted as such for such exchange, market or system. If, after the date hereof, the benchmark times generally accepted in the securities industry for determining the market price of a stock as of a given trading day shall change from those set forth above, the fair market value shall be determined as of such other generally accepted benchmark times.

4. Conversion. The holders of the Preferred Stock shall have conversion rights as follows:

(a) Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original Issue Price for the relevant series by the Conversion Price for such series. (The number of shares of Common Stock into which each share of Preferred Stock of a series may be converted is hereinafter referred to as the "Conversion Rate" for each such series.) Upon any decrease or increase in the Conversion Price for any series of Preferred Stock, as described in this Section 4, the Conversion Rate for such series shall be appropriately increased or decreased.

(b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the "Securities Act"), covering the offer and sale of the Corporation's Common Stock, provided that the aggregate gross proceeds to the Corporation are not less than $35,000,000, (ii) upon the receipt by the Corporation of a written request for such conversion from the holders of a majority of the Preferred Stock then outstanding (voting as a single class and on an as-converted basis), or, if later, the effective date for conversion specified in such requests, or (iii) upon the merger of Diego Pelticer, Inc., a Washington corporation ("Diego Washingion"), with and into the Corporation (the "Diego Acquisition") (each of the events referred to in (i), (ii) and (iii) above are referred to herein as an "Automatic Conversion Event").

(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then fair market value of a share of Common Stock as determined by the Board of Directors. For such purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated, and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to receive certificates therefor, he shall either (A) surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock or (B) notify the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that on the date of an Automatic Conversion Event, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided further, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to ,the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. On the datc of the occurrence of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, notwithstanding that the certificates representing such shares of Preferied Stock shall not have been surrendered at the office of the Corporation, that notice from the Corporation shall not have been received by any holder of record of shares of Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be actually delivered to such holder.

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The Corporation shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock a certificate or certificates for the number of shares of Common Stock to which the holder shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act or a merger, sale, financing, or liquidation of the Corporation or other event, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing of such transaction or upon the occurrence of such event, in which case the person(s) entitled to receive the Common Stock issuable upon such conversion of the Prefer^-ed Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such transaction or the occurrence of such event.

(d) Adjustments to Conversion Price for Diluting Issues.

(i) Special Definition. For purposes of this paragraph 4(d), "Additional Shares of Common" shall mean all shares of Common Stock issued (or, pursuant to paragraph 4(d)(iii), deemed to he issued) by the Corporation after the filing of this Amended and Restated. Certificate of Incorporation, other than issuances or deemed issuances of:

(1) shares of Common Stock upon the conversion of the Preferred Stock;

(2) shares of Common Stock and options, warrants or other rights to purchase Common Stock issued or issuable to employees, officers or directors of, or consultants or advisors to the Corporation or any subsidiary pursuant to stock grants, restricted stock purchase agreements, option plans, purchase plans, incentive programs or similar arrangements, shares of or options, warrants or other rights to purchase Common Stock net of any stock repurchases or expired or terminated options pursuant to the terms of any option plan, restricted stock purchase agreement or similar arrangement;

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(3) shares of Common Stock upon the exercise or conversion of Options or Convertible Securities;

(4) shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock or pursuant to any event for which adjustment is made pursuant to paragraph 4(e), 4(f) or 4(g) hereof;

(5) shares of Common Stock issued or issuable in a registered public offering under the Securities Act pursuant to which all outstanding shares of Preferred Stock are automatically converted into Common Stock pursuant to an Automatic Conversion Event;

(6) shares of Common Stock issued or issuable pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board of Directors;

(7) shares of Common Stock issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing or commercial leasing transaction approved by the Board of Directors;

(8) shares of Common Stock issued or issuable in connection with any settlement of any action, suit, proceeding or litigation approved by the Board of Directors;

(9) shares of Common Stock issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors; and

(10) shares of Common Stock issued or issuable to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors.

(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share (as determined pursuant to paragraph 4(d)(v)) for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such series of Preferred Stock,

(iii) Deemed Issue of Additional Shares of Common. In the event the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options and the conversion or exchange of the underlying securities, shall be deemed to have been issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which shares arc deemed to be issued:

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(1) no further adjustment in the Conversion Price of any series of Preferred Stock shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock in connection with the exercise of such Options or conversion or exchange of such Convertible Securities;

(2) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Corporation or in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof (other than a change pursuant to the anti-dilution provisions of such Options or Convertible Securities such as this Section 4(d) or pursuant to Recapitalization provisions of such Options or Convertible Securities such as Sections 4(e), 4(f) and 4(g) hereof), the Conversion Price of each series of Preferred Stock and any subsequent adjustments based thereon shall be recomputed to reflect such change as if such change had been in effect as of the original issue thereof (or upon the occurrence of the record date with respect thereto);

(3) no readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price of a series of Preferred Stock to an amount above the Conversion Price that would have resulted from any other issuances of Additional Shares of Common and any other adjustments provided for herein between the original adjustment date and such readjustment date;

(4) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Conversion Price of each Series of Preferred Stock computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:

(a) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such exercised Options plus the consideration actually received by the Corporation upon such exercise or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and

(b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of such exercised Options, plus the consideration deemed to have been received by the Corporation (determined pursuant to Section 4(d)(v)) upon the issue of the Convertible Securities with respect to which such Options were actually exercised; and

(5) if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which became effective on such record date shall be canceled as of the close of business on such record date, and thereafter the Conversion Price shall be adjusted pursuant to this paragraph 4(d)(iii) as of the actual date of their issuance.

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(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to paragraph 4(d)(iii)) without consideration or for a consideration per share less than the applicable Conversion Price of a series of Preferred Stock in effect on the date of and immediately prior to such issue, then, the Conversion Price of the affected series of Preferred Stock shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price, and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common so issued. Notwithstanding the foregoing, the Conversion Price shall not be reduced at such time if the amount of such reduction would be less than $0.01, but any such amount shall be carried forward, and a reduction will be made with respect to such amount at the time of, arid together with, any subsequent reduction which, together with such amount and any other amounts so carried forward, equal $0.01 or more in the aggregate. For the purposes of this subsection 4(d)(iv), all shares of Common Stock issuable upon conversion of all outstanding shares of Preferred Stock and the exercise and/or conversion of any other outstanding Convertible Securities and all outstanding Options shall be deemed to be outstanding.

(v) Determination of Consideration. For purposes of this subsection 4(d), the consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares of Common shall be computed as follows:

(1) Cash and Property. Such consideration shall:

(a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with such issuance;

(b) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors; and

(c) in the event Additional Shares of Common are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as reasonably determined in good faith by the Board of Directors.

(2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to paragraph 4(d)(iii) shall be determined by dividing:

(x) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by

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(y) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

(e) Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

(f) Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred Stock, the Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. in the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall he combined (by reclassification or otherwise) into a lesser number of shares of Preferred Stock, Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, .be proportionately increased.

(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3 ("Liquidation Rights"), if the Common Stock issuable upon conversion of the Preferred Stock shall he changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive each holder of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

(h) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock.

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(i) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price of any series of Preferred Stock may be waived by the consent or vote of the holders of the majority of the outstanding shares of such series either before or after the issuance causing the adjustment. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.

(j) Notices of Record Date. In the event that this Corporation shall propose at any time:

(i) to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

(ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or

(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a liquidation, dissolution or winding up of the corporation pursuant to Section 3(d);

then, in connection with each such event, this Corporation shall send to the holders of the Preferred Stock prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (ii) and (iii) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent or vote of the holders of a majority of the Preferred Stock, voting as a single class and on an as-converted basis.

(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

5. Voting.

(a) Restricted Class Voting. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes.

(b) No Series Voting. Other than as provided herein or required by law, there shall be no series voting.

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(c) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock held by such holder could be converted as of the record date. The holders of shares of the Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote. Holders of Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted), shall be disregarded.

(d) Adjustment in Authorized Common Stock. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by an affirmative vote of the holders of a majority of the stock of the Corporation.

(e) Common Stock. Each holder of shares of Common Stock shall be entitled to one vote for each share thereof held.

6. Amendments and Changes. As long as at least fifty percent of the shares of Preferred Stock issued as of the Original Issue Date remain issued and outstanding, the Corporation shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent of the outstanding shares of the Preferred Stock:

(a) amend, alter or repeal any provision of the Certificate of Incorporation or bylaws of the Corporation (including pursuant to a merger (but specifically excluding the Diego Acquisition)) if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Preferred Stock or any series thereof;

(b) increase or decrease (other than for decreases resulting from conversion of the Preferred Stock) the authorized number of shares of Preferred Stock or any series thereof;

(c) authorize or create (by reclassification, merger or otherwise) or issue or obligate itself to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security) having rights, preferences or privileges with respect to dividends or payments upon liquidation senior to any series of Preferred Stock, or having voting rights other than those granted to the Preferred Stock generally;

(d) enter into any transaction or series of related transactions deemed to be a liquidation, dissolution or winding up of the Corporation pursuant to Section 3(d);

(e) authorize a merger, acquisition or sale of substantially all of the assets of the Corporation or any of its subsidiaries (other than a merger exclusively to effect a change of domicile of the Corporation);

(f) voluntarily liquidate or dissolve;

(g) declare or pay any Distribution with respect to the Common Stock of the Corporation;

(h) amend this Section 6.

For purposes of clarity, the approval of the Preferred Stock shall not be required for the consummation of the Diego Acquisition.

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7. Notices. Any notice required by the provisions of this ARTICLE V to be given to the holders of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holder's address appearing on the books of the Corporation.

ARTICLE VI

The Corporation is to have perpetual existence.

ARTICLE VII

Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

ARTICLE VIII

Unless otherwise set forth herein, the number of directors that constitute the Board of Directors of the Corporation shall be fixed by, or in the manner provided in, the Bylaws of the Corporation.

ARTICLE IX

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.

ARTICLE X

1. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

2. The Corporation shall have the power to indemnify, to the extent permitted by the Delaware General Corporation Law, as it presently exists or may hereafter be amended from time to time, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding") by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.

3. Neither any amendment nor repeal of this ARTICLE X, nor the adoption of any provision of this Corporation's Certificate of Incorporation inconsistent with this ARTICLE X, shall eliminate or reduce the effect of this ARTICLE X, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this ARTICLE X, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

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ARTICLE XI

Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

ARTICLE XII

To the extent permitted by law, the Corporation renounces any expectancy that a Covered Person offer the Corporation an opportunity to participate in a Specified Opportunity and waives any claim that the Specified Opportunity constitutes a corporate opportunity that should have been presented by the Covered Person to the Corporation; provided, however, that the Covered Person acts in good faith. A "Covered Person" is any member of the Board of Directors of the Corporation (who is not an employee of the Corporation or any of its subsidiaries) who is a partner, member or employee of a Fund. A "Specified Opportunity" is any transaction or other matter that is presented to the Covered Person in his or her capacity as a partner, member or employee of a Fund (and other than in connection with his or her service as a member of the Board of Directors of the Corporation) that may be an opportunity of interest for both the Corporation and the Fund. A "Fund" is an entity that is a holder of Preferred Stock and that is primarily in the business of investing in other entities, or an entity that manages such an entity.

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Exhibit 3.2

BYLAWS OF

DIEGO PELLICER WORLDWIDE INC.

Adopted September 5, 2013

TABLE OF CONTENTS

		*Page*

ARTICLE I — MEETINGS OF STOCKHOLDERS		1

1.1	Place of Meetings	1
1.2	Annual Meeting	1
1.3	Special Meeting	1
1.4	Notice of Stockholders' Meetings	1
1.5	Quorum	2
1.6	Adjourned Meeting; Notice	2
1.7	Conduct of Business	2
1.8	Voting	2
1.9	Stockholder Action by Written Consent Without a Meeting	3
1.10	Record Dates	4
1.11	Proxies	4
1.12	List of Stockholders Entitled to Vote	5

ARTICLE II — DIRECTORS		5

2.1	Powers	5
2.2	Number of Directors	5
2.3	Election, Qualification and Term of Office of Directors	5
2.4	Resignation and Vacancies	5
2.5	Place of Meetings; Meetings by Telephone	6
2.6	Conduct of Business	6
2.7	Regular Meetings	7
2.8	Special Meetings; Notice	7
2.9	Quorum; Voting	7
2.10	Board Action by Written Consent Without a Meeting	7
2.11	Fees and Compensation of Directors	8
2.12	Removal of Directors	8

ARTICLE III — COMMITTEES		8

3.1	Committees of Directors	8
3.2	Committee Minutes	8
3.3	Meetings and Actions of Committees	8
3.4	Subcommittees	9

ARTICLE IV — OFFICERS		9

4.1	Officers	9
4.2	Appointment of Officers	9
4.3	Subordinate Officers	9
4.4	Removal and Resignation of Officers	9
4.5	Vacancies in Offices	10
4.6	Representation of Shares of Other Corporations	10
4.7	Authority and Duties of Officers	10

TABLE OF CONTENTS

(Continued)

		Page

ARTICLE V — INDEMNIFICATION		10

5.1	Indemnification of Directors and Officers in Third Party Proceedings	10
5.2	Indemnification of Directors and Officers in Actions by or in the Right of the Company	10
5.3	Successful Defense	11
5.4	Indemnification of Others	11
5.5	Advanced Payment of Expenses	11
5.6	Limitation on Indemnification	11
5.7	Determination; Claim	12
5.8	Non-Exclusivity of Rights	12
5.9	Insurance	12
5.10	Survival	13
5.11	Effect of Repeal or Modification	13
5.12	Certain Definitions	13

ARTICLE VI — STOCK		13

6.1	Stock Certificates; Partly Paid Shares	13
6.2	Special Designation on Certificates	14
6.3	Lost Certificates	14
6.4	Dividends	14
6.5	Stock Transfer Agreements	14
6.6	Registered Stockholders	14
6.7	Transfers	15

ARTICLE VII — MANNER OF GIVING NOTICE AND WAIVER		15

7.1	Notice of Stockholder Meetings	15
7.2	Notice by Electronic Transmission	15
7.3	Notice to Stockholders Sharing an Address	16
7.4	Notice to Person with Whom Communication is Unlawful	16
7.5	Waiver of Notice	16

ARTICLE VIII — GENERAL MATTERS		16

8.1	Restrictions on Operations	16
8.2	Fiscal Year	17
8.3	Seal	17
8.4	Annual Report	17
8.5	Construction; Definitions	17

ARTICLE IX — AMENDMENTS		17

BYLAWS

ARTICLE I — MEETINGS OF STOCKHOLDERS

1.1 Place of Meetings. Meetings of stockholders of Diego Pellicer Worldwide Inc. (the "Company") shall be held at any place, within or outside the State of Delaware, determined by the Company's board of directors (the "Board"). The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the "DGCL"). In the absence of any such designation or determination, stockholders' meetings shall be held at the Company's principal executive office.

1.2 Annual Meeting. An annual meeting of stockholders shall be held for the election of directors at such date and time as may be designated by resolution of the Board from time to time. Any other proper business may be transacted at the annual meeting. The Company shall not be required to hold an annual meeting of stockholders, provided that (i) the stockholders are permitted to act by written consent under the Company's certificate of incorporation and these bylaws, (ii) the stockholders take action by written consent to elect directors, and (iii) the stockholders unanimously consent to such action or, if such consent is less than unanimous, all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.

1.3 Special Meeting. A special meeting of the stockholders may be called at any time by the Board, Chairperson of the Board, Chief Executive Officer or President (in the absence of a Chief Executive Officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting.

If any person(s) other than the Board calls a special meeting, the request shall:

(i) be in writing;

(ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and

(iii) be delivered personally or sent by registered mail or by facsimile transmission to the Chairperson of the Board, the Chief Executive Officer, the President (in the absence of a Chief Executive Officer) or the Secretary of the Company.

The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this Section 1.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.

1.4 Notice of Stockholders' Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the written notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.

1.5 Quorum. Except as otherwise provided by law, the certificate of incorporation or these bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. Where a separate vote by a class or series or classes or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.

If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, in the manner provided in Section 1.6, until a quorum is present or represented.

1.6 Adjourned Meeting; Notice. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the DGCL and Section 1.10 of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

1.7 Conduct of Business. Meetings of stockholders shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in the absence of the foregoing persons by the Chief Executive Officer, or in the absence of the foregoing persons by the President, or in the absence of the foregoing persons by a Vice President, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting. The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.

1.8 Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 1.10 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.

Except as may be otherwise provided in the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of capital stock held by such stockholder which has voting power upon the matter in question. Voting at meetings of stockholders need not be by written ballot and, unless otherwise required by law, need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission (as defined in Section 7.2 of these bylaws), provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.

Except as otherwise required by law, the certificate of incorporation or these bylaws, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of shares of such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series, except as otherwise provided by law, the certificate of incorporation or these bylaws.

1.9 Stockholder Action by Written Consent Without a Meeting. Unless otherwise provided in the certificate of incorporation, any action required by the DGCL to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

An electronic transmission (as defined in Section 7.2) consenting to an action to be taken and transmitted by a stockholder or proxy holder, or by a person or persons authorized to act for a stockholder or proxy holder, shall be deemed to be written, signed and dated for purposes of this section, provided that any such electronic transmission sets forth or is delivered with information from which the Company can determine (i) that the electronic transmission was transmitted by the stockholder or proxy holder or by a person or persons authorized to act for the stockholder or proxy holder and (ii) the date on which such stockholder or proxy holder or authorized person or persons transmitted such electronic transmission.

In the event that the Board shall have instructed the officers of the Company to solicit the vote or written consent of the stockholders of the Company, an electronic transmission of a stockholder written consent given pursuant to such solicitation may be delivered to the Secretary or the President of the Company or to a person designated by the Secretary or the President. The Secretary or the President of the Company or a designee of the Secretary or the President shall cause any such written consent by electronic transmission to be reproduced in paper form and inserted into the corporate records.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.

1.10 Record Dates. In order that the Company may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.

If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the provisions of Section 213 of the DGCL and this Section 1.10 at the adjourned meeting.

In order that the Company may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company in accordance with applicable law. If no record date has been fixed by the Board and prior action by the Board is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

In order that the Company may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

1.11 Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.

1.12 List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the Company shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Company's principal place of business. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

ARTICLE II — DIRECTORS

2.1 Powers. The business and affairs of the Company shall be managed by or under the direction of the Board, except as may be otherwise provided in the DGCL or the certificate of incorporation.

2.2 Number of Directors. The Board shall consist of one or more members, each of whom shall be a natural person. Unless the certificate of incorporation fixes the number of directors, the number of directors shall be determined from time to time by resolution of the Board. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

2.3 Election, Qualification and Term of Office of Directors. Except as provided in Section 2.4 of these bylaws, and subject to Sections 1.2 and 1.9 of these bylaws, directors shall be elected at each annual meeting of stockholders. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors. Each director shall hold office until such director's successor is elected and qualified or until such director's earlier death, resignation or removal.

2.4 Resignation and Vacancies. Any director may resign at any time upon notice given in writing or by electronic transmission to the Company. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation which is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.

Unless otherwise provided in the certificate of incorporation or these bylaws:

(i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

(ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

If at any time, by reason of death or resignation or other cause, the Company should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the voting stock at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.

A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office and until such director's successor is elected and qualified, or until such director's earlier death, resignation or removal.

2.5 Place of Meetings; Meetings by Telephone. The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

2.6 Conduct of Business. Meetings of the Board shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

2.7 Regular Meetings. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

2.8 Special Meetings; Notice. Special meetings of the Board for any purpose or purposes may be called at any time by the Chairperson of the Board, the Chief Executive Officer, the President, the Secretary or any two directors.

Notice of the time and place of special meetings shall be:

(i) delivered personally by hand, by courier or by telephone;

(ii) sent by United States first-class mail, postage prepaid;

(iii) sent by facsimile; or

(iv) sent by electronic mail,

directed to each director at that director's address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Company's records.

If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least 4 days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Company's principal executive office) nor the purpose of the meeting.

2.9 Quorum; Voting. At all meetings of the Board, a majority of the total authorized number of directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.

If the certificate of incorporation provides that one or more directors shall, have more or less than one vote per director on any matter, every reference in these bylaws to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.

2.10 Board Action by Written Consent Without a Meeting. Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

2.11 Fees and Compensation of Directors. Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.

2.12 Removal of Directors. Unless otherwise restricted by statute, the certificate of incorporation or these bylaws, any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office.

ARTICLE III — COMMITTEES

3.1 Committees of Directors. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Company. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Company.

3.2 Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

3.3 Meetings and Actions of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

(i) Section 2.5 (Place of Meetings; Meetings by Telephone);

(ii) Section 2.7 (Regular Meetings);

(iii) Section 2.8 (Special Meetings; Notice);

(iv) Section 2.9 (Quorum; Voting);

(v) Section 2.10 (Board Action by Written Consent Without a Meeting); and

(vi) Section 7.5 (Waiver of Notice)

with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:

(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;

(ii) special meetings of committees may also be called by resolution of the Board; and

(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

Any provision in the certificate of incorporation providing that one or more directors shall have more or less than one vote per director on any matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.

3.4 Subcommittees. Unless otherwise provided in the certificate of incorporation, these bylaws or the resolutions of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

ARTICLE IV — OFFICERS

4.1 Officers. The officers of the Company shall be a President and a Secretary. The Company may also have, at the discretion of the Board, a Chairperson of the Board, a Vice Chairperson of the Board, a Chief Executive Officer, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.

4.2 Appointment of Officers. The Board shall appoint the officers of the Company, except such officers as may be appointed in accordance with the provisions of Section 4.3 of these bylaws.

4.3 Subordinate Officers. The Board may appoint, or empower the Chief Executive Officer or, in the absence of a Chief Executive Officer, the President, to appoint, such other officers and agents as the business of the Company may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.

4.4 Removal and Resignation of Officers. Any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.

Any officer may resign at any time by giving written notice to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.

4.5 Vacancies in Offices. Any vacancy occurring in any office of the Company shall be filled by the Board or as provided in Section 4.3.

4.6 Representation of Shares of Other Corporations. Unless otherwise directed by the Board, the President or any other person authorized by the Board or the President is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares of any other corporation or corporations standing in the name of the Company. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

4.7 Authority and Duties of Officers. Except as otherwise provided in these bylaws, the officers of the Company shall have such powers and duties in the management of the Company as may be designated from time to time by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.

ARTICLE V — INDEMNIFICATION

5.1 Indemnification of Directors and Officers in Third Party Proceedings. Subject to the other provisions of this Article V, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding") (other than an action by or in the right of the Company) by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.

5.2 Indemnification of Directors and Officers in Actions by or in the Right of the Company. Subject to the other provisions of this Article V, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

5.3 Successful Defense. To the extent that a present or former director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 5.1 or Section 5.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.

5.4 Indemnification of Others. Subject to the other provisions of this Article V, the Company shall have power to indemnify its employees and agents to the extent not prohibited by the DGCL or other applicable law. The Board shall have the power to delegate to such person or persons the determination of whether employees or agents shall be indemnified.

5.5 Advanced Payment of Expenses. Expenses (including attorneys' fees) incurred by an officer or director of the Company in defending any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a written request therefor (together with documentation reasonably evidencing such expenses) and an undertaking by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under this Article V or the DGCL. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply to any Proceeding for which indemnity is excluded pursuant to these bylaws, but shall apply to any Proceeding referenced in Section 5.6(11) or 5.6(iii) prior to a determination that the person is not entitled to be indemnified by the Company.

Notwithstanding the foregoing, unless otherwise determined pursuant to Section 5.8, no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company, in which event this paragraph shall not apply) in any Proceeding if a determination is reasonably and promptly made (i) by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.

5.6 Limitation on Indemnification. Subject to the requirements in Section 5.3 and the DGCL, the Company shall not be obligated to indemnify any person pursuant to this Article V in connection with any Proceeding (or any part of any Proceeding):

(i) for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;

(ii) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements);

(iii) for any reimbursement of the Company by such person of any bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of the Company, as required in each case under the Securities Exchange Act of 1934, as amended (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), or the payment to the Company of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements);

(iv) initiated by such person, including any Proceeding (or any part of any Proceeding) initiated by such person against the Company or its directors, officers, employees, agents or other indemnitees, unless (a) the Board authorized the Proceeding (or the relevant part of the Proceeding) prior to its initiation, (b) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (c) otherwise required to be made under Section 5.7 or (d) otherwise required by applicable law; or

(v) if prohibited by applicable law.

5.7 Determination; Claim. If a claim for indemnification or advancement of expenses under this Article V is not paid by the Company or on its behalf within 90 days after receipt by the Company of a written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. To the extent not prohibited by law, the Company shall indemnify such person against all expenses actually and reasonably incurred by such person in connection with any action for indemnification or advancement of expenses from the Company under this Article V, to the extent such person is successful in such action [, and, if requested by such person, shall advance such expenses to such person, subject to the provisions of Section 5.5]. In any such suit, the Company shall, to the fullest extent not prohibited by law, have the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.

5.8 Non-Exclusivity of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.

5.9 Insurance. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of the DGCL.

5.10 Survival. The rights to indemnification and advancement of expenses conferred by this Article V shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

5.11 Effect of Repeal or Modification. Any amendment, alteration or repeal of this Article V shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to such amendment, alteration or repeal.

5.12 Certain Definitions. For purposes of this Article V, references to the "Company" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article V with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article V, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Company" as referred to in this Article V.

ARTICLE VI — STOCK

6.1 Stock Certificates; Partly Paid Shares. The shares of the Company shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Company by the Chairperson of the Board or Vice-Chairperson of the Board, or the President or a Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Company shall not have power to issue a certificate in bearer form.

The Company may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books and records of the Company in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Company shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

6.2 Special Designation on Certificates. If the Company is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Company shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the Company shall issue to represent such class or series of stock, a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the Company shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this Section 6.2 or Sections 156, 202(a) or 218(a) of the DGCL or with respect to this Section 6.2 a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.

6.3 Lost Certificates. Except as provided in this Section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

6.4 Dividends. The Board, subject to any restrictions contained in the certificate of incorporation or applicable law, may declare and pay dividends upon the shares of the Company's capital stock. Dividends may be paid in cash, in property, or in shares of the Company's capital stock, subject to the provisions of the certificate of incorporation.

The Board may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.

6.5 Stock Transfer Agreements. The Company shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Company to restrict the transfer of shares of stock of the Company of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

6.6 Registered Stockholders. The Company:

(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;

(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and

(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

6.7 Transfers. Transfers of record of shares of stock of the Company shall be made only upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer.

ARTICLE VII — MANNER OF GIVING NOTICE AND WAIVER

7.1 Notice of Stockholder Meetings. Notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the Company's records. An affidavit of the Secretary or an Assistant Secretary of the Company or of the transfer agent or other agent of the Company that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

7.2 Notice by Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the Company under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any such consent shall be deemed revoked if:

(i) the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent; and

(ii) such inability becomes known to the Secretary or an Assistant Secretary of the Company or to the transfer agent, or other person responsible for the giving of notice.

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

Any notice given pursuant to the preceding paragraph shall be deemed given:

(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;

(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;

(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

(iv) if by any other form of electronic transmission, when directed to the stockholder.

An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Company that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

An "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Notice by a form of electronic transmission shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.

7.3 Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Company under the provisions of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any stockholder who fails to object in writing to the Company, within 60 days of having been given written notice by the Company of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice.

7.4 Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under the DGCL, the certificate of incorporation or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Company is such as to require the filing of a certificate under the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

7.5 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.

ARTICLE VIII — GENERAL MATTERS

8.1 Restrictions on Operations. The Company shall not produce, process or retail cannabis, or own an entity that produces, processes or retails cannabis, unless and until it becomes legal to engage in such operations in all jurisdictions in which the Company operates and where its' directors, officers, employees and stockholders reside.

8.2 Fiscal Year. The fiscal year of the Company shall be fixed by resolution of the Board and may be changed by the Board.

8.3 Seal. The Company may adopt a corporate seal, which shall be in such form as may be approved from time to time by the Board. The Company may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

8.4 Annual Report. The Company shall cause an annual report to be sent to the stockholders of the Company to the extent required by applicable law. If and so long as there are fewer than 100 holders of record of the Company's shares, the requirement of sending an annual report to the stockholders of the Company is expressly waived (to the extent permitted under applicable law).

8.5 Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person.

ARTICLE IX — AMENDMENTS

These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the Company may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.

A bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed by the Board.

CERTIFICATE OF ADOPTION OF BYLAWS

DIEGO PELLICER WORLDWIDE INC.

The undersigned certifies that he or she is the duly elected, qualified and acting Secretary of Diego Pellicer Worldwide Inc., a Delaware corporation (the "Company"), and that the foregoitis bylaws, comprising twenty (20) pages, were adopted as the bylaws of the Company on September 5, 2013 by the sole incorporator of the Company.

The undersigned has executed this certificate as of September 5, 2013.

	/s/ Steve Hubbard
	Steve Hubbard, Secretary

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 17, 2014, is made by and between Diego Pellicer Worldwide, Inc., a Corporation organized under the laws of Delaware (the “Company”) and Ron Throgmartin (the “Executive”). Each of the Company and the Executive are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, the Company wishes to employ the Executive as its Chief Executive Officer and the Executive wishes to accept such employment, on the terms set forth below, effective as of September 16, 2014 (the “Effective Date”);

NOW, THEREFORE, in consideration of the foregoing premises, and the covenants, representations and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, the Parties, intending to be legally bound, hereby agree as follows:

1. Term. The Company hereby employs the Executive, and the Executive hereby accepts such employment, for an initial term commencing as of the Effective Date and continuing for a term of five years, through September 16, 2019 (the “Termination Date”) unless sooner terminated in accordance with the provisions of Section 5 hereof (the “Initial Term”), with such employment to continue for successive one-year periods in accordance with the terms of this Agreement (subject to termination as aforesaid) unless either Party notifies the other Party of non-renewal in writing prior to three months before the expiration of the initial term and each annual renewal, as applicable. (The period during which the Executive is employed hereunder being hereinafter referred to as the “Term”).

2. Duties. During the Term, the Executive shall be employed by the Company as its Chief Executive Officer. The Executive shall devote his entire working time, energy, attention, skill and best efforts to the affairs of the Company and to the faithful performance of the duties of said offices and shall faithfully perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Company’s Board of Directors.

3. Place of Performance. Employee shall be based in the State of Georgia except for travel required for Company business.

4. Compensation.

(a) Base Salary. The Company shall pay the Executive during the Term a salary at a minimum rate of Two Hundred Fifty Thousand Dollars ($250,000) per annum for the period beginning on the Effective Date through the Initial Term (the “Base Salary”), in accordance with the customary payroll practices of the Company applicable to senior executives. Following the completion of an offering of the Company’s Series A Preferred stock, the Executive’s Base Salary shall automatically be increased to Two Hundred Eighty Thousand ($280,000) per annum. For each year thereafter, the Company’s Board (or compensation committee of the Company’s Board, or, at the discretion of the Company’s Board, by a committee composed of two or more members of the Company’s Board (for purposes of this Agreement, the “Committee”) shall review the Executive’s Base Salary and may provide for such increases therein as it may, in its discretion, deem appropriate. (Any such increased salary shall constitute the “Base Salary” as of the time of the increase.)

(b) Bonus. During the Term, in addition to the Base Salary, for each fiscal year of the Company ending during the Term, the Executive shall have the opportunity to receive an annual bonus in an amount and on such terms to be determined by the Company’s Board, or, at the discretion of the Company’s Board, the Committee (“Performance Bonus”). The Company’s Board, or, at the discretion of the Company’s Board, the Committee, shall further have the discretion to grant Executive annual bonuses in such amounts and on such terms as it shall determine in its sole discretion. Nothing contained in the foregoing shall limit the Executive’s eligibility to receive any other bonus under any other bonus plan, stock option or equity–based plan, or other policy or program of the Company.

(c) Equity Incentive Compensation. Executive shall be entitled to participate in any equity compensation plan of the Company in which he is eligible to participate, and may, without limitation, be granted in accordance with any such plan options to purchase shares of the Company’s common stock, shares of restricted stock, and other equity awards in the discretion of the Company’s Board or the Committee.

(d) Benefits. The Executive shall be permitted during the Term to participate in any group life, hospitalization or disability insurance plans, health programs, retirement plans, fringe benefit programs and other benefits that may be available to other senior executives of the Company generally, in each case to the extent that the Executive is eligible under the terms of such plans or programs. Full medical, dental, and vision coverage will be provided and paid for by the Company.

(e) Vacation. The Executive shall be entitled to vacation of no less than 20 business days per year, not including national holidays, to be credited in accordance with ordinary Company policies.

(f) Expenses. The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of-pocket expenses actually incurred (and, in the case of reimbursement, paid) by the Executive during the Term in the performance of the Executive’s services under this Agreement, in accordance with the Company’s policies regarding such reimbursements.

5. Termination of Employment; Change of Control.

(a) Termination upon Death or Disability. This Agreement and Executive’s employment hereunder shall automatically terminate on the date on which Executive dies or becomes permanently incapacitated. Executive shall be deemed to have become “permanently incapacitated” on the date that is thirty (30) days after the Company has determined that Executive has suffered a Permanent Incapacity (as defined below) and so notifies Executive. For purposes of this Agreement, “Permanent Incapacity” shall mean that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than twelve (12) months under an accident and health plan covering employees of the service provider’s employer.

(b) Termination by the Company for Cause. The Company may terminate this Agreement and Executive’s employment hereunder without Cause (as defined below), effective upon delivery of written notice to Executive given at any time during the Term (without any necessity for prior notice). For purposes of this Agreement, “Cause” shall mean the Executive’s: (i) conviction of any felony or any other crime involving moral turpitude, (ii) fraud against the Company or any of its subsidiaries or affiliates or theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries or affiliates, (iii) willful breach of Executive’s fiduciary duties to the Company, or (iv) breach by Executive of any provision of this Agreement.

(c) Termination by Company without Cause. The Company may terminate this Agreement and Executive’s employment hereunder without Cause, effective upon delivery of written notice to Executive given at any time during the Term (without any necessity for prior notice) provided that the Company complies with all provisions of this Agreement, including without limitation, obligations related to severance, vesting of options and continuation of benefits as set forth herein.

(d) Termination by the Executive for Good Reason. The Executive may terminate this Agreement and Executive’s employment hereunder with Good Reason (as defined below). For purposes of this Agreement, “Good Reason” shall mean (i) the material reduction of the Executive’s title, authority, duties and responsibilities or the assignment to the Executive of duties materially inconsistent with the Executive’s position or positions with the Company; (ii) a material reduction in Base Salary of the Executive; (iii) the Company’s material breach of this Agreement; or (iv) any change in the geographic location at which Executive must perform the services under this Agreement, which change is reasonably material to Executive. Notwithstanding the foregoing, (x) Good Reason shall not be deemed to exist unless notice of termination on account thereof (specifying a termination date no later than thirty (30) days from the date of such notice) is given no later than 30 days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises and (y) if there exists (without regard to this clause (y)) an event or condition that constitutes Good Reason, the Company shall have fifteen (15) days from the date notice of such a termination is given to cure such event or condition and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.

(e) Termination by the Executive other than for Good Reason. The Executive may terminate this Agreement and Executive’s employment hereunder other than for Good Reason, provided that the Executive gives the Company no less than thirty (30) days prior written notice of such termination.

(f) Change of Control. The Executive may terminate this Agreement and Executive’s employment hereunder within the six month period following the Transition Period (as defined below), provided that the Executive gives the Company no less than thirty (30) days prior written notice of such termination. For purposes of this Agreement, “Transition Period” means the period commencing on the date of the Change of Control (as defined below) and ending on the first anniversary of such Change of Control. For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following:

(i) Change in Ownership. A change in ownership of the Company occurs on the date that any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, excluding the acquisition of additional stock by a person or more than one person acting as a group who is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company.

(ii) Change in Effective Control. A change in effective control of the Company occurs on the date that either: (A) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company; or (B) a majority of the members of the Company’s Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board prior to the date of the appointment or election; provided, that this paragraph (2) will apply to the Company only if no other corporation is a majority shareholder of the Company.

(iii) Change in Ownership of Substantial Assets. A change in the ownership of a substantial portion of the Company’s assets occurs on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

(iv) Intended Interpretation. It is the intent of the Parties that the definition of Change in Control under this Agreement be construed consistent with the definition of “Change in Control” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable Treasury Regulations, as amended from time to time.

6. Payments Upon Termination.

(a) Upon termination of this Agreement and Executive’s employment hereunder due to Executive’s death or disability pursuant to Section 5(a) hereof, (i) the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) shall be entitled to receive any Base Salary and other benefits (including any bonus for a calendar year completed before termination) earned and accrued under this Agreement prior to the date of termination (and reimbursement under this Agreement for expenses incurred prior to the date of termination) and (ii) the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) shall have no further rights to any other compensation or benefits hereunder, or any other rights hereunder (but, for the avoidance of doubt, shall receive such disability and death benefits as may be provided under the Company’s plans and arrangements in accordance with their terms).

(b) Upon termination of this Agreement and Executive’s employment hereunder (i) by the Company for Cause pursuant to Section 5(b) hereof or by Executive other than for Good Reason pursuant to Section 5(e) hereof, (i) the Company shall pay to Executive an amount equal to Executive’s then Base Salary and other benefits (including any bonus for a calendar year completed before termination) earned and accrued under this Agreement prior to the date of termination (and reimbursement under this Agreement for expenses incurred prior to the date of termination) and (ii) the Executive shall have no further rights to any other compensation or benefits under this Agreement on or after the termination of employment.

(c) Upon termination of this Agreement and Executive’s employment hereunder (i) by the Company without Cause pursuant to Section 5(c) hereof, (ii) by Executive for Good Reason pursuant to Section 5(d) hereof or (iii) by Executive following a Change in Control of the Company pursuant to Section 5(f) hereof, (x) the Company shall pay to Executive (I) an amount equal to the Executive’s then Base Salary for a period of (a) three years or (b) through the Termination Date, whichever is greater, and other benefits (including any bonus for a calendar year completed before termination) earned and accrued under this Agreement prior to the date of termination (and reimbursement under this Agreement for expenses incurred prior to the date of termination); and (II) an amount equal to 3.0 times (a) the average of the Base Salary amounts paid to Executive over the three calendar years prior to the date of Termination, (b) if less than three years have elapsed between the date of this Agreement and the date of termination, the highest Base Salary paid to Executive in any calendar year prior to the date of Termination, or (c) if less than 12 months have elapsed from the date of this Agreement to the date of termination, the highest Base Salary received in any month times 12; and (y) the Executive shall have no further rights to any other compensation or benefits under this Agreement on or after the termination of employment.

(d) Nothing contained in this Section 6 shall affect the terms of any employee stock options, stock grants, or other equity-based compensation that may have been issued by the Company to Executive, which in the event of termination of Executive’s employment with the Company shall continue to be governed by their own terms and conditions.

(e) Unless the payment is required to be delayed pursuant to Code Section 409A (as defined below), the cash amounts payable to the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) under this Section 6 shall be paid to the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) in a single-sum payment within 60 days following the effective date of termination of this Agreement and Executive’s employment hereunder.

7. Parachutes. If any amount payable to or other benefit receivable by the Executive pursuant to this Agreement would be deemed to constitute a Parachute Payment (as defined below), alone or when added to any other amount payable or paid to or other benefit receivable or received by the Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement or other agreement), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then the Parachute Payments shall be reduced (but not below zero) so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the excise tax imposed by Section 4999 of the Code. Any such reduction shall be made by first reducing severance benefits (if any). Notwithstanding the foregoing, if the reduction of Parachute Payments under this Section 7 would be equal to or greater than $50,000, then there shall be no such reduction and the full amount of the Parachute Payment shall be payable. “Parachute Payment” shall mean a “parachute payment” as defined in Section 280G of the Code. The calculation under this Section 7 shall be as determined by the Company’s accountants.

8. Execution of Release. The Executive acknowledges that, if required by the Company prior to making the payments and benefits set forth in Section 5 (other than accrued but unpaid Base Salary and other benefits), all such payments and benefits are subject to his execution of a general release from liability of the Company, and their respective Officers (including his successor), Directors/Managers and employees, and such release becoming irrevocable by its terms. If Executive fails to execute such release, or such release does not become irrevocable, all such payments and benefits set forth in Section 6 hereof shall be forfeited.

9. Application of Code Section 409A.

(a) This Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code (“Code Section 409A”). If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Code Section 409A, then such benefit or payment will be provided in full (to the extent not paid in part at earlier date) at the earliest time thereafter when such sanctions will not be imposed. For purposes of Code Section 409A, all payments to be made upon a termination of employment under this Agreement may only be made upon Executive’s “separation from service” (within the meaning of such term under Code Section 409A) with the Company, each payment made under this Agreement will be treated as a separate payment, and the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments. In no event will Executive, directly or indirectly, designate the calendar year of payment, except as permitted under Code Section 409A.

(b) Notwithstanding anything herein to the contrary, if, at the time of Executive’s “separation from service” with the Company, the Company has securities which are publicly traded on an established securities market and Executive is a “specified employee” (as such term is defined in Code Section 409A) and it is necessary to postpone the commencement of any payments or benefits otherwise payable under this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under Code Section 409A, then the Company will postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive), until the first payroll date that occurs after the date that is six (6) months following Executive’s “separation of service” with the Company. If any payments are postponed due to such requirements, such postponed amounts will be paid with interest at the applicable federal rate as provided under Section 7872(f)(2)(A) of the Code in a lump sum to Executive on the first payroll date that occurs after the date that is six (6) months following Executive’s “separation of service” with the Company. If Executive dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Code Section 409A will be paid to the personal representative of Executive’ s estate within sixty (60) days after the date of Executive’s death. Payments pursuant to Section 6 of this Agreement are intended to satisfy the short-term deferral exception under Code Section 409A.

(c) All reimbursements and in-kind benefits provided under this Agreement will be made or provided in accordance with the requirements of Code Section 409A, including, where applicable, the requirement that (i) any reimbursement will be for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

(d) To the extent applicable, all grants, awards, bonuses or other payments made to Executive or for which Executive is eligible under any Company bonus, incentive, deferred compensation plan or program or any other compensation arrangement will be structured to comply with the requirements of Code Section 409A or an exception from such requirements.

10. Covenants of the Executive.

(a) Confidentiality. During the Term, the Company has and will continue to provide Executive with access to, and may confide in him, information, business methods and systems, techniques and methods of operation developed at great expense by the Company and which are assets of the Company. Executive recognizes and acknowledges that: (i) all Confidential Information (defined below) is the property of the Company and is unique, extremely valuable and developed and acquired by great expenditures of time, effort and cost; (ii) the misuse, misappropriation or unauthorized disclosure by Executive of the Confidential Information would constitute a breach of trust and would cause serious irreparable injury to the Company; and (iii) it is essential to the protection of the Company’s goodwill and to the maintenance of the Company’s competitive position that the Confidential Information be kept secret and that Executive not disclose the Confidential Information to others or use same to his own advantage or to the advantage of others. Accordingly, Executive shall not, during the Term or thereafter, directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation, association or other entity, or use on his own behalf, any confidential and proprietary information of the Company, including, but not limited to, information relating to strategic plans, sales, costs, client lists, client preferences, client identities, investment strategies, computer programs, profits or the business affairs and financial condition of the Company, or any of its clients, or any of the Company’s business methods, systems, marketing materials, clients or techniques (collectively “Confidential Information”), except for (i) such disclosures where required by law, but only after written notice to the Company detailing the circumstances and legal requirement for the disclosure; or (ii) as authorized during the performance of Executive’s duties for such use or purpose as are reasonably believed by Executive to be in the best interests of the Company. At any time, upon request, Executive shall deliver to the Company all of its property including, but not limited to, its Confidential Information (whether electronically stored or otherwise) which are in his possession or under his control. Property to be returned includes, but is not limited to, notebook pages, documents, records, prototypes, client files, drawings, electronically stored data, computer media or any other materials or property in Executive’s possession.

(b) Noninterference. During the Term and for a period of one (1) year following the end of the Term (the “Restricted Period”), for whatever reason, he will not, directly or indirectly, for himself or on behalf of any third party, at any time or in any manner:

(i) persuade, induce, solicit, influence or attempt to influence, or cause any person who is an employee of the Company to terminate his or her relationship with the Company or refer any such employee to anyone, without prior written approval from the Company;

(ii) request or cause any of the Company’s clients or potential clients to cancel, modify or terminate any existing or continuing or, to Executive’s knowledge, prospective business relationship with the Company;

(iii) engage in or participate in any effort or act to induce, or in any way cause, any client or, to Executive’s knowledge, prospective client of the Company, to deal with Executive or any other person or entity except in a capacity as representative of the Company, or otherwise take any action which might reasonably be expected to be disadvantageous to the Company;

(iv) persuade, induce, solicit, influence or attempt to influence, or cause any client or, to Executive’s knowledge, prospective client of the Company to cease or refrain from doing business, or to decline to do business, or to change or alter any existing or prospective business relationship, with the Company;

(v) accept business from, or perform or provide any services for, any client, or to Executive’s knowledge, prospective client of the Company;

(vi) contract with or communicate with, in either case in connection with services, any client or, to Executive’s knowledge, prospective client of the Company; or

(vii) provide any third party with any information concerning any client, or to Executive’s knowledge, prospective client of the Company, including but not limited to, the disclosure of any client name or data, in whatever form, to such third party.

(c) Noncompetition. During the Term and Restricted Period, Executive shall not, directly or indirectly, engage or participate in, or become employed by, or affiliated with, or enter into or maintain a contractual relationship with, or render advisory or any other services to, any person or business entity or organization, of whatever form, that competes with the Company in the United States or any other location in which the Company conducts business prior to your termination date.

(d) Injunctive Relief. Executive acknowledges that his compliance with the covenants in Sections 9(a), 9(b) and 9(c) hereof (the “Restrictive Covenants”) is necessary to protect the good will, Confidential Information and other proprietary interests of the Company, that such covenants are supported by adequate and sufficient consideration, and that, in the event of any violation or threatened violation by Executive of any such provision, the Company will sustain serious, irreparable and substantial harm to its business, the extent of which will be difficult to determine and impossible to remedy by an action at law for money damages. Accordingly, Executive agrees that, in the event of such violation or threatened violation by him, the Company shall be entitled to an injunction before trial from any court of competent jurisdiction as a matter of course and upon the posting of not more than a nominal bond, in addition to all such other legal and equitable remedies as may be available to the Company. Executive further acknowledges that he has carefully considered the nature and extent of the restrictions contained herein and the rights and remedies conferred upon the Company under this Agreement, and hereby acknowledges and agrees that the same are reasonable, are designed to protect the legitimate business interests of the Company, and do not confer benefits upon the Company disproportionate to the detriment upon him. In the event that Executive violates any of the covenants in this Agreement and the Company commences legal action for injunctive or other relief, the Company shall have the benefit of the full period of the covenants, computed from the date Executive ceased violation of the covenants, either by order of the court or otherwise. Executive acknowledges that any claim or cause of action he may have against the Company shall not constitute a defense to the enforcement by the Company of his covenants in Article 5 of this Agreement (e.g., these covenants are independent of any other provision in this Agreement and of any other promise made to Executive). Executive also acknowledges that his experience and capabilities are such that he can obtain suitable employment otherwise than in violation of the covenants in this Agreement and that the enforcement of these covenants will not prevent the earning of a livelihood nor cause undue hardship. Without limiting the foregoing, in the event of a breach by Executive of any Restrictive Covenant, the Company’s obligations under this Agreement shall immediately terminate, Executive shall not be entitled to any additional monetary payments or benefits of any kind whatsoever and Executive shall reimburse the Company for all of its attorneys fees and costs associated with any legal or equitable proceedings or litigation seeking to enforce the terms of this Agreement.

(e) Remedies Cumulative and Concurrent. The rights and remedies of the Company as provided in this Section 10 shall be cumulative and concurrent and may be pursued separately, successively or together, at the sole discretion of the Company, and may be exercised as often as occasion therefor shall arise. The failure to exercise any right or remedy shall in no event be construed as a waiver or release thereof.

(f) Executive’s Authorization. Executive authorizes the Company to inform any third parties, including future employers, prospective employers and the Company’s clients or prospective clients, of the existence of this Agreement and his obligations under it.

(g) Survivability. The provisions of this Section 10 shall survive the cessation of Employee’s employment for any reason, as well as the expiration of this Agreement at the end of its Term or at any time prior thereto.

(h) Definition of Company. For purposes of this Section 10, the term “Company” shall include the Company and any of its parents, subsidiaries, affiliates or any related companies including their respective successors and assigns.

11. Other Provisions.

(a) Severability. The Executive acknowledges and agrees that (i) he has had an opportunity to seek advice of counsel in connection with this Agreement and (ii) the Restrictive Covenants are reasonable in geographical and temporal scope and in all other respects. If it is determined that any of the provisions of this Agreement or any part thereof, including, without limitation, any of the Restrictive Covenants, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

(b) Duration and Scope of Covenants. If any court or other decision-maker of competent jurisdiction determines that any of the Restrictive Covenants contained in this Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

(i) Subject to the limitations of this Section 11(c), if any dispute arises between the Parties under or concerning this Agreement or the terms hereof, or regarding the manner in which Executive was treated while employed by the Company, the termination of his employment, or any alleged violation by the Company of Executive’s rights under any common law theory, or any applicable federal, state, or local law, statute, regulation, or ordinance (including without limitation 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and any other local, state, or federal legislation that pertains to employee rights or discrimination in employment), the Parties agree to submit such issue to final and binding arbitration in accordance with the then existing National Rules for the Resolution of Employment Disputes of the American Arbitration Association. Nothing in this Section 11(c), however, will preclude the Company from seeking the judicial relief set forth under Section 10 of this Agreement.

(ii) The Parties agree that the interpretation and enforcement of the arbitration provisions in this Agreement will be governed exclusively by the Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1 et seq., provided that they are enforceable under the FAA, and will otherwise be governed by the law of the State of Delaware.

(iii) The Parties agree and understand that one of the objectives of this arbitration agreement is to resolve disputes expeditiously, as well as fairly, and to those ends it is the obligation of all Parties to raise any disputes subject to arbitration hereunder in an expeditious manner. Accordingly, the Parties agree that, as to any dispute that can be brought hereunder, a demand for arbitration must be postmarked or delivered in person to the other Party no later than six (6) months after the date the demanding Party knows or should have known of the event or events giving rise to the claim. Failure to demand arbitration on a claim within these time limits is intended to, and will to the furthest extent permitted by law, be a waiver and release with respect to such claims. If, and only if, the waiver and release of claims referenced in the immediately preceding sentence is found by a court of competent jurisdiction to be unenforceable as against Executive or the Company under this Agreement, then the Parties will nevertheless submit such claims to arbitration pursuant to this Section 11(c) within the time permitted by law.

(iv) The Company will pay the arbitrator’s fees.

(v) Unless otherwise agreed by the Parties, arbitration will take place in Seattle, WA.

(vi) In rendering an award, the arbitrator will determine the rights and obligations of the Parties according to federal law and the substantive law of the State of Washington without regard to any principles governing conflicts of laws and the arbitrator’s decision will be governed by state and federal substantive law, including state and federal discrimination laws referenced in Section 11(c)(i) hereof, as though the matter were before a court of law.

(vii) Any arbitration award will be accompanied by a written statement containing a summary of the issues in controversy, a description of the award, and an explanation of the reasons for the award. The decision of the arbitrator will be made within thirty (30) days following the close of the hearing. The Parties agree that the award will be enforceable exclusively by any state or federal court of competent jurisdiction within Seattle, WA.

(viii) It is understood and agreed by the Parties that their agreement herein concerning arbitration does not contain, and cannot be relied upon Executive to contain, any promises or representations concerning the duration of the employment relationship, or the circumstances under or procedures by which the employment relationship may be modified or terminated.

(ix) If any part of this arbitration procedure is in conflict with any mandatory requirement or applicable law, the law will govern, and that part of this arbitration procedure will be reformed and construed to the maximum extent possible in conformance with the applicable law. The arbitration procedure will remain otherwise unaffected and enforceable.

(d) Notices. All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized standing), or (iv) if delivered by facsimile transmission or other electronic means, including email, on the business day of such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day. If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 11(d), or the refusal to accept same, the notice, demand, consent, request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable:

If to the Company, to:

3496 Fairwiew Way

West Linn, OR 97068

Attention: Steve Hubbard

Telephone No.: 206-427-4100

Facsimile No.: 503-635-7097

With copies to:

Szaferman Lakind Blumstein & Blader, PC

101 Grovers Mill Road
Second Floor
Lawrenceville, NJ 08648

Attention: Gregg Jaclin, Esq.

Telephone No.: 609-275-0400

Facsimile No.: 609-275-4511

If to the Executive, to:

Ron Throgmartin
3685 Thomson Middle Road

Bufford, GA 30519

Attention: Ron Throgmartin

Telephone No.:678-5468598

Facsimile No.: 425-282-1508

Any such person may by notice given in accordance with this Section 11(d) to the other Parties hereto designate another address or person for receipt by such person of notices hereunder.

(e) Section Headings. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to or “Section” or “Sections” refer to the corresponding Article or Section or Sections of this Agreement, unless the context indicates otherwise.

(f) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Unless otherwise expressly provided, the word “including” shall mean including without limitation. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of such representation, warranty, or covenant. All words used in this Agreement will be construed to be of such gender or number as the circumstances require.

(h) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

(i) Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto.

(j) Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any such right, power or privilege nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

(k) Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of the Executive) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law.

(l) Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law.

(m) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

(n) Survival. Anything contained in this Agreement to the contrary notwithstanding, the provisions of Section 10 and any other provisions of this Agreement expressly imposing obligations that survive termination of Executive’s employment hereunder, and the other provisions of this Section 11 to the extent necessary to effectuate the survival of such provisions, shall survive termination of this Agreement and any termination of the Executive’s employment hereunder.

(o) Existing Agreements. The Executive represents to the Company that he is not subject or a Party to any employment or consulting agreement, non-competition covenant or other agreement, covenant or understanding which might prohibit him from executing this Agreement or limit his ability to fulfill his responsibilities hereunder.

(p) Legal Fees: The Parties hereto agree that the Company shall pay the legal fees relating to any dispute, claim, action or proceeding between the Parties hereto arising out of or relating to the terms and conditions of this Agreement or any provision thereof.

(q) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

(r) Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WANES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[Signatures follow on next page]

IN WITNESS WHEREOF, the Company and the Executive have caused their respective signature pages to this Agreement to be duly executed as of the date first written above.

	COMPANY:

	DIEGO PELICER WORLDWIDE, INC.

	By:	/s/ Alan D. Valdes
	Name:	Alan D. Valdes
	Title:	Chairman

	EXECUTIVE:

		/s/ Ron Throgmartin
	Name:	Ron Throgmartin Chief Executive Officer

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 17, 2014, is made by and between Diego Pellicer Worldwide, Inc., a Corporation organized under the laws of Delaware (the “Company”) and Douglas C. Anderson (the “Executive”). Each of the Company and the Executive are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, the Company wishes to employ the Executive as its Vice Chairman & Senior Vice President of Strategy & Vision and the Executive wishes to accept such employment, on the terms set forth below, effective as of September 16, 2014 (the “Effective Date”);

2. Duties. During the Term, the Executive shall be employed by the Company as its Vice Chairman, Sr. Vice President of Strategy & Vision. The Executive shall devote his entire working time, energy, attention, skill and best efforts to the affairs of the Company and to the faithful performance of the duties of said offices and shall faithfully perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Company’s Board of Directors.

3. Place of Performance. Employee shall be based in Washington State except for travel required for Company business.

4. Compensation.

(e) Vacation. The Executive shall be entitled to vacation of no less than 20 business days per year, not including national holidays, to be credited in accordance with ordinary Company policies.

5. Termination of Employment; Change of Control.

6. Payments Upon Termination.

9. Application of Code Section 409A.

10. Covenants of the Executive.

(v) accept business from, or perform or provide any services for, any client, or to Executive’s knowledge, prospective client of the Company;

(vi) contract with or communicate with, in either case in connection with services, any client or, to Executive’s knowledge, prospective client of the Company; or

11. Other Provisions.

(iv) The Company will pay the arbitrator’s fees.

(v) Unless otherwise agreed by the Parties, arbitration will take place in Seattle, WA.

If to the Company, to:

3496 Fairwiew Way

West Linn, OR 97068

Attention: Steve Hubbard

Telephone No.: 206-427-4100

Facsimile No.: 503-635-7097

With copies to:

Szaferman Lakind Blumstein & Blader, PC

101 Grovers Mill Road
Second Floor
Lawrenceville, NJ 08648

Attention: Gregg Jaclin, Esq.

Telephone No.: 609-275-0400

Facsimile No.: 609-275-4511

If to the Executive, to:

Douglas C. Anderson
5327 140^th Avenue NE

Bellevue, WA 98005

Attention: Douglas Anderson

Telephone No.:206-679-6677

Facsimile No.: 425-282-1508

Any such person may by notice given in accordance with this Section 11(d) to the other Parties hereto designate another address or person for receipt by such person of notices hereunder.

(l) Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law.

(m) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

[Signatures follow on next page]

IN WITNESS WHEREOF, the Company and the Executive have caused their respective signature pages to this Agreement to be duly executed as of the date first written above.

	COMPANY:

	DIEGO PELICER WORLDWIDE, INC.

	By:	/s/ Ron Throgmartin
	Name:	Ron Throgmartin
	Title:	Chief Executive Officer

	EXECUTIVE:

		/s/ Douglas C. Anderson
	Name:	Douglas C. Anderson Vice Chairman, Sr. VP

Exhibit 10.3

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 17, 2014, is made by and between Diego Pellicer Worldwide, Inc., a Corporation organized under the laws of Delaware (the “Company”) and Alan D. Valdes (the “Executive”). Each of the Company and the Executive are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, the Company wishes to employ the Executive as its Chairman and the Executive wishes to accept such employment, on the terms set forth below, effective as of September 16, 2014 (the “Effective Date”);

2. Duties. During the Term, the Executive shall be employed by the Company as its Chairman. The Executive shall devote his entire working time, energy, attention, skill and best efforts to the affairs of the Company and to the faithful performance of the duties of said offices and shall faithfully perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Company’s Board of Directors.

3. Place of Performance. Employee shall be based in the State of New York except for travel required for Company business.

4. Compensation.

(a) Base Salary. The Company shall pay the Executive during the Term a salary at a minimum rate of Two Hundred Fifty Thousand ($250,000) per annum for the period beginning on the Effective Date through the Initial Term (the “Base Salary”), in accordance with the customary payroll practices of the Company applicable to senior executives. Following the completion of an offering of the Company’s Series A Preferred stock, the Executive’s Base Salary shall automatically be increased to Two Hundred Eighty Thousand ($280,000) per annum. For each year thereafter, the Company’s Board (or compensation committee of the Company’s Board, or, at the discretion of the Company’s Board, by a committee composed of two or more members of the Company’s Board (for purposes of this Agreement, the “Committee”) shall review the Executive’s Base Salary and may provide for such increases therein as it may, in its discretion, deem appropriate. (Any such increased salary shall constitute the “Base Salary” as of the time of the increase.)

(e) Vacation. The Executive shall be entitled to vacation of no less than then 20 business days per year, not including national holidays, to be credited in accordance with ordinary Company policies.

5. Termination of Employment; Change of Control.

6. Payments Upon Termination.

9. Application of Code Section 409A.

10. Covenants of the Executive.

(v) accept business from, or perform or provide any services for, any client, or to Executive’s knowledge, prospective client of the Company;

(vi) contract with or communicate with, in either case in connection with services, any client or, to Executive’s knowledge, prospective client of the Company; or

11. Other Provisions.

(iv) The Company will pay the arbitrator’s fees.

(v) Unless otherwise agreed by the Parties, arbitration will take place in Seattle, WA.

	If to the Company, to:		3496 Fairwiew Way West Linn, OR 97068 Attention: Steve Hubbard Telephone No.: 206-427-4100 Facsimile No.: 503-635-7097

	With copies to:		Szaferman Lakind Blumstein & Blader, PC 101 Grovers Mill Road Second Floor Lawrenceville, NJ 08648 Attention: Gregg Jaclin, Esq. Telephone No.: 609-275-0400 Facsimile No.: 609-275-4511

	If to the Executive, to:		Alan D. Valdes 165 River Road Mill Rift, PA 18340 Attention: Alan Valdes Telephone No.: 917-880-3862 Facsimile No.: 425-282-1508

Any such person may by notice given in accordance with this Section 11(d) to the other Parties hereto designate another address or person for receipt by such person of notices hereunder.

(l) Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law.

(m) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

[Signatures follow on next page]

IN WITNESS WHEREOF, the Company and the Executive have caused their respective signature pages to this Agreement to be duly executed as of the date first written above.

	COMPANY:

	DIEGO PELICER WORLDWIDE, INC.

	By:	/s/ Ron Throgmartin
	Name:	Ron Throgmartin
	Title:	Chief Executive Officer

	EXECUTIVE:

		/s/ Alan D. Valdes
	Name:	Alan D. Valdes Chairman

Exhibit 10.4

COMMERCIAL AGREEMENT
BETWEEN
DIEGO PELLICER WORLDWIDE INC.
AND
DIEGO PELLICER, INC.

This COMMERCIAL AGREEMENT (this “Agreement”) is entered into as of April , 2014 by and between Diego Pellicer Worldwide Inc., a Delaware corporation (“Diego Delaware”) and Diego Pellicer, Inc., a Washington corporation (“Diego Washington”). Diego Delaware and Diego Washington are sometimes referred to herein as the “Parties.”

RECITALS

WHEREAS, Diego Washington has applied for a recreational cannabis retail license from the Washington State Liquor Control Board (the “WSLCB”).

WHEREAS, the regulations promulgated by the WSLCB under Initiative 502 (“1-502”) have placed significant restrictions on how applicants for recreational cannabis licenses may raise funds to operate their business.

WHEREAS, Diego Delaware services licensed cannabis producers, processors and retailers by, among other things, acquiring and building-out compliant producing, processing, and retailing properties and leasing or subleasing these properties to licensed cannabis producers, processors and retailers.

WHEREAS, Diego Delaware and Diego Washington have entered into that certain Agreement and Plan of Merger dated as of January 23, 2014 (02487959). (the “Merger Agreement”).

WHEREAS, Diego Delaware has learned from certain of its partners, investors, and financial advisors that the Merger Agreement, in its current form, is untenable.

WHEREAS, Diego Delaware and Diego Washington desire to amend the Merger Agreement and enter into the transactions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises made herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Receipt of Operating Capital. Diego Washington hereby agrees that it will make commercially reasonable efforts to secure operating capital in an amount not less than $350,000 for use as operating capital from its current investors, or other 1-502 compliant sources (the “Capital Contribution”).

2. Merger Agreement; Offer. The Parties agree that they will amend and restate the Merger Agreement pursuant to the terms of that certain Amended and Restated Agreement and Plan of Merger of even date herewith. Diego Delaware hereby agrees that it will offer to the current holders of Series A Preferred Stock of Diego Washington (the “Diego Washington Preferred), and to current holders of convertible promissory notes convertible for shares of Diego Washington Preferred (the “Notes”), in each case who are also accredited investors and other cash investors in Diego Washington, the right, for 20 days, after Diego Washington has raised not less than $350,000 to convert their investment in Diego Washington Preferred and/or Notes for that number of shares of Series A Preferred Stock of Diego Delaware (the “Diego Delaware Preferred”) as listed on Exhibit A (the “Offer”).

3. Capital Investments. Subject to the completion of: (i) Diego Washington obtaining the Capital Contribution; and (ii) the Merger Agreement being amended pursuant to the terms of Section 2 above, Diego Delaware hereby agrees that it will:

(i) Enter into a sublease with Diego Washington, for the sublease of retail space located at 2215 4^th Ave. South at a monthly rent to be mutually agreed to by the Parties (the “Flagship Store”);

(ii) Enter into a sublease with Diego Washington, conditioned upon its receipt of additional 1-502 retail licenses, for up to two additional I-502 compliant retail locations mutually agreeable to the Parties, at a monthly rent for each additional location to be mutually agreed upon by the Parties (each, an “Ancillary Store”);

(iii) Fund the build-out of the Flagship Store to specifications mutually agreed upon by the Parties, in an amount of up to $700,000 if Diego Washington has received an 1-502 retail license for that location and up to $400,000 otherwise (the “Flagship Store Build-Out”), which Flagship Store Build-Out shall be completed as soon as commercially feasible.;

(iv) Fund the build-out of each Ancillary Store to specifications mutually agreed upon by the Parties, in an amount of up to $400,000 for each Ancillary Store (each, an “Ancillary Store Build-Out”). Each Ancillary Store Build-Out shall be complete as soon as commercially feasible for each Ancillary Store, however Diego Delaware shall not be required to build out more than one store at a time.

4. Notices and Demands. All notice, demands or other communications required or permitted hereunder shall be in writing and shall be (a) sent by U.S. registered or certified mail, return receipt requested, with postage prepaid, (b) sent by personal delivery by a nationally recognized courier service for same-day or next-day delivery, or (c) sent by email or facsimile (with confirmation of receipt), addressed to the applicable party at the addresses set forth below or at such other addresses as such parties may designate by notice to the other parties:

If to Diego Washington:	Diego Pellicer, Inc.
	2606 Second Avenue #535
	Seattle, Washington 98121
	Attention: Peter Norris Email: petem.diego@gmail.com

If to Diego Delaware:	Diego Pellicer Worldwide Inc.
	3496 Fairview Way
	West Linn, Oregon 97068
	Attn: Steve Hubbard
	Email: sshubbard@earthlink.net

All notices, demands and requests shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient's next business day.

5. Amendment. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each Party.

6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Washington, without regard to the conflicts of law provisions thereof, or of any other state.

7. Jurisdiction; Venue. The Parties, by their execution of this Agreement, hereby irrevocably submit to the exclusive jurisdiction of the U.S. federal and state courts located in King County, Washington, for the purpose of any suit, action or other proceeding arising out of, or based upon, this Agreement, and waive any objection to the laying of venue with respect to such courts or that any such court constitutes an inconvenient forum.

8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED BY ANY PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY ACTS OR OMISSIONS OF ANY PARTY IN CONNECTION THEREWITH.

9. Successors and Assigns. The rights and obligations of the Parties shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the Parties.

10. Assignment. The rights, interests or obligations hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by any Party without the prior written consent of the other Parties.

11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original copy and all of which shall constitute one and the same agreement.

12. Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more of the Parties and delivered by such Party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

13. Entire Agreement. This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof, and except with respect to the Merger Agreement, as the same may be amended from time to time, supersedes in their entirety any and all written or oral agreements previously existing among the Parties with respect to such subject matter.

14. Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

15. Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

16. Attorneys' Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

17. Independent Counsel Each of the parties hereto have had the opportunity to engage independent counsel and affirm that they have satisfied themselves as to the fairness of this agreement and hold the firm Carincross and Hempleman harmless as to their involvement with the crafting of this agreement.

(signature page follows)

IN WITNESS WHEREOF, the Parties have executed this Agreement on the first date set forth above.

	DIEGO PELLICER WORLDWIDE INC.,
	a Delaware corporation

	By:
		Ron Throgmartin, President

	DIEGO PELLICER, INC.,
	a Washington corporation

	By:
		Peter Norris, President

Exhibit A

“WW Series A Shares” offered in exchange for a reduction in the number of share to be issued to Diego Pellicer Inc. shareholders at the tome of merger totaling 1,066,661 if all were accepted.

Exhibit 10.5

AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER OF

DIEGO PELLICER, INC.,

A WASHINGTON CORPORATION,

and

DIEGO PELLICER WORLDWIDE INC.,

A DELAWARE CORPORATION

This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of April 19, 2014 is made by and between Diego Pellicer, Inc., a Washington corporation (“Diego Washington”), and Diego Pellicer Worldwide Inc., a Delaware corporation (“Diego Washington”). Diego Delaware and Diego Washington are sometimes referred to in this Agreement as the “Constituent Companies." This Agreement amends, restates, replaces and supersedes in its entirety that certain Agreement and Plan of Merger between the Constituent Companies dated as of January 23, 2014 (the “Prior Agreement").

RECITALS

A. The Constituent Companies hereby agree that it is in their mutual best interests to amend and restate the Prior Agreement, and to replace it with this Agreement. The Constituent Companies hereby agree that the Prior Agreement shall be of no further force or effect.

B. Diego Delaware is a corporation, duly organized and validly existing under the laws of the State of Delaware. As of the date of this Agreement, pursuant to Diego Delaware's Certificate of Incorporation, as amended (the “Certificate of Incorporation”), Diego Delaware has authorized: (i) 87,000,000 shares of Common Stock, par value $0.0001 per share, of which 13,520,000 are issued and outstanding, and 2,480,000 are reserved for issuance under Diego Delaware's 2013 Equity Incentive Plan; and (ii) 13,000,000 shares of Preferred Stock, par value $0.0001 per share, which is designated Series A Preferred Stock, and 776,106 of which are issued and outstanding.

C. Diego Washington is a corporation, duly organized and validly existing under the laws of the State of Washington. As of the date of this Agreement, pursuant to Diego Washington's Articles of Incorporation, as amended (the "Articles of Incorporation"), Diego Washington has authorized: (1) 33,700,000 shares of Common Stock, of which 7,300,000 are issued and outstanding, and 2,800,000 are reserved for issuance under Diego Washington's 2013 Equity Incentive Plan; and (ii) 6,300,000 shares of Series A Preferred Stock authorized, and 133,333 of which are issued and outstanding.

D. The stockholders Diego Delaware have entered into certain agreements binding themselves to vote in favor of the Merger with certain exceptions.

E. The board of directors of each of Diego Delaware and Diego Washington have approved this Agreement and have directed that this Agreement be executed by the undersigned officers.

AGREEMENT

In consideration of the mutual agreements and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Diego Delaware and Diego Washington hereby agree as follows:

1. Merger

1.1 Merger. Subject to the fulfillment of the conditions set forth in Section 1.2 below, and in accordance with the provisions of this Agreement, the Delaware General Corporation Law (the “DGCL”) and the Washington Business Corporation Act (the “WBCA”), at Diego Delaware's sole discretion, Diego Washington shall be merged with and into Diego Delaware (the "Merger"), and the separate existence of Diego Washington shall cease and Diego Delaware shall be the surviving Company.

1.2 Conditions Precedent. In no event shall Diego Delaware take any action to consummate the Merger until either: (i) the production, processing and retailing of cannabis for recreational use in the United States becomes legally permissible for privately owned entities under United States federal law; or (ii) Diego Washington or Diego Delaware receives the written consent of the Washington State Liquor Control Board providing that Diego Washington, or its corporate successor, may continue to be a licensed cannabis retailer and/or own cannabis retail entities in the State of Washington while also maintaining shareholders, directors, officers, and employees who are residents of states other than the State of Washington (the “Condition Precedent”). Neither party shall be obligated to take any action to consummate the Merger if the other party is in violation of any of the covenants set forth in this Agreement. If Diego Delaware desires to consummate the Merger following the fulfillment of the Condition Precedent, then Diego Delaware shall notify Diego Washington in writing not less than 60 days prior to the date that Diego Delaware files the Certificate of Merger in connection with the consummation of the Merger (the “Consummation Notice”). Notwithstanding the prior fulfillment of the Condition Precedent and delivery of the Consummation Notice, neither party shall take any action to consummate the Merger if either party demonstrates, through reasonable and substantial evidence, to the other party not later than 45 days following Diego Washington's receipt of the Consummation Notice that either party to this Agreement or any of their respective directors, officers, employees or stockholders is more likely to become subject to federal criminal charges as a result of the consummation of the Merger than they would be if the Merger was not consummated. If the consummation of the Merger is rejected by Diego Washington pursuant to the terms of this Section 1.2 or Section 1.3 below, Diego Delaware may submit a new Consummation Notice to Diego Washington at any time not less than 90 days after the date of rejection of the previous Consummation Notice.

1.3 Disqualifying Events. In no event shall Diego Washington be required to consummate or approve the Merger if; on the date of delivery of any Consummation Notice:

(a) Diego Delaware is unable, or admits in writing its inability, to pay its debts generally as they mature;

(b) Diego Delaware has been dissolved or liquidated;

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(c) Diego Delaware has commenced a voluntary or involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law nor or hereafter in effect or consented to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or

(d) Diego Delaware is subject to any outstanding injunction, order, decree, ruling, or charge, or is a party, or is threatened to be made a party, to any such action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator that is likely to have a Material Adverse Effect (as defined below) on the business of Diego Delaware. For purposes of this section, "Material Adverse Effect" shall mean the amount in controversy is greater than 10% of Diego Delaware's total assets.

1.4 Filing and Effectiveness. Unless earlier abandoned pursuant to Sections 1.2 or 4.5 of this Agreement, or rejected pursuant to Section 1.3 of this Agreement, the Merger shall become effective upon completion of the following actions:

(a) Diego Washington's receipt of the Consummation Notice from Diego Delaware;

(b) Adoption and approval of this Agreement and the Merger by the respective shareholders of each of the Constituent Companies in accordance with the applicable requirements of the DGCL, the WBCA and the bylaws of Diego Delaware and Diego Washington;

(c) The satisfaction or waiver of the Condition Precedent, the other terms of Section 1.2, and all of the conditions precedent to the consummation of the Merger as specified in this Agreement;

(d) The Constituent Companies' receipt of all third party consents necessary for the legal consummation of the Merger as reasonably determined by their respective boards of directors;

(e) The filing with the Secretary of State of Delaware of an executed Certificate of Merger meeting the requirements of the DGCL (the “Certificate of Merger”); and

(f) The filing with the Secretary of State of Washington of executed Articles of Merger meeting the requirements of the WBCA (the “Articles of Merger”).

The date and time when the Merger becomes effective is referred to in this Agreement as the “Effective Time of the Merger.” Copies of the Certificate of Merger and the Articles of Merger shall be held by each of the Constituent Companies and may be filed by either of them upon the satisfaction of the terms and conditions of this Section 1.4.

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1.5 Effect of the Merger. At the Effective Time of the Merger, the separate existence of Diego Washington shall cease and Diego Delaware, as the surviving company, (a) shall continue to possess all of its assets, rights, powers and property as constituted immediately prior to the Effective Time of the Merger, (b) shall be subject to all actions previously taken by its board of directors on its behalf and Diego Washington's board of directors, (c) shall succeed, without other transfer, to all of the assets, rights, powers and property of Diego Washington in the mariner more fully set forth in Title 8 Section 259 of the DGCL and Sections 23B.11.060 and 23B.11.100 of the WBCA, (d) shall continue to be subject to all of the debts, liabilities and obligations of Diego Delaware as constituted immediately prior to the Effective Time of the Merger, (e) shall succeed, without other transfer, to all of the debts, liabilities and obligations of Diego Washington in the same manner as if Diego Delaware had itself incurred them, all as more fully provided under the applicable provisions of Title 8 Section 259 of the DGCL and Sections 23B.11.060 and 23B.11.100 of the WBCA, and (f) the Surviving Bylaws (as defined below) shall be effective for Diego Delaware as the surviving company, and the Bylaws of Diego Washington shall have no further force or effect.

1.6 Assignment and Assumption of Tax Liabilities. Upon the Effective Time of the Merger, in addition to the effects on the assets, rights, powers and property, and the debts, liabilities and obligations of the parties hereto occurring by operation of law as set forth in Section 1.5 above, Diego Washington hereby assigns, and Diego Delaware hereby assumes, all of Diego Washington's on-going tax liabilities incurred prior to the Effective Time of the Merger.

2. Charter Documents, Directors and Officers

2.1 Certificate of Incorporation. The Certificate of Incorporation of Diego Delaware as in effect immediately prior to the Effective Time of the Merger shall continue in full force and effect as the Certificate of Incorporation of Diego Delaware (the “Surviving Certificate of Incorporation”) until duly amended in accordance with the provisions thereof and applicable law.

2.2 Bylaws. The Bylaws of Diego Delaware as in effect immediately prior to the Effective Time of the Merger shall continue in full force and effect as the Bylaws of Diego Delaware (the “Surviving Bylaws”) until duly amended in accordance with the provisions thereof and applicable law.

2.3 Directors and Officers. The members of the board of directors of Diego Delaware as of immediately prior to the Effective Time of the Merger shall be the members of the board of directors of Diego Delaware, and members of the board of directors shall serve until their successors shall have been duly elected and qualified or as otherwise provided by applicable law, the Certificate of Incorporation or the Surviving Bylaws. The Chief Executive Officer of Diego Delaware as of immediately prior to the Effective Time of the Merger shall be the Chief Executive Officer of Diego Delaware, and the Secretary of Diego Delaware as of immediately prior to the Effective Time of the Merger shall be the Secretary of Diego Delaware, each of whom shall serve until their successors shall have been duly appointed or as otherwise provided by applicable law or the Surviving Bylaws.

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3. Manner of Conversion of Securities

3.1 Conversion of Shares.

In exchange for all outstanding shares of Diego Washington,

At the Effective Time of the Merger, Diego Delaware shall deliver to Diego Washington 1,386,667 shares of Diego Delaware common stock.

In addition to a) above, in exchange for reduced consideration in the eventual Merger, Diego Delaware shall offer up to 1,066,661 shares of Diego Delaware Series A stock to the current cash investors, note holders and Series A investors in amounts as listed on Exhibit A to this Agreement. Any shares not issued to those listed on Exhibit A will be added to the 1,386,667 shares in a) above.

Except as required by 3.6 below, in no event will Diego Delaware issue more than 2,453,328 shares, the "Merger Shares" to effect the purposes of this Agreement.

If after eight (8) years from the effective date of this Agreement, Diego Delaware has not consummated the Merger, the then remaining Diego Washington shareholders will have the right, but not the obligation, upon surrender of their Diego Washington equity interests, to exchange their pro rata, as if fully converted as in 3.3 below, equity interest in Diego Washington into their pro rata share of the remaining Merger Shares held by Diego Delaware that have not previously been issued under the terms of this paragraph 3.1.

If the language of a), b), c) and d) above does not properly effectuate or is somehow contrary to a conversion of shares and merger of the companies then each company shall execute an addendum to, or replacement for, this agreement that will accomplish the purpose of these paragraphs and at the same time allow for the intended merger.

No fractional shares of Diego Delaware shall be issued upon the Conversion. In lieu of Diego Delaware issuing any fractional shares upon the Conversion, Diego Delaware shall pay to any holders of Diego Washington Stock who would otherwise receive a fraction of a share of Diego Delaware an amount equal to the product obtained by multiplying the value of one share of Diego Washington Stock (determined by the quotient of the Diego Washington Enterprise Value divided by the number of shares of Diego Washington Stock issued and outstanding) by the fraction of a share not issued pursuant to the previous sentence.

3.2 Dissenting Shareholders. Any issued and outstanding shares of Diego Washington Stock held by persons who object to the Merger and comply with Sections 23B.13.010 and 23B.13.020 and any other applicable provision of the WBCA as in effect at the Effective Time of the Merger concerning the right of shareholders of Diego Washington to dissent from the Merger and demand payment of the fair value of their Diego Washington Stock (the "Dissenting Shareholders") shall not be converted as described above, but shall have the right to receive such consideration as may be determined to be due to such Dissenting Shareholders pursuant to Sections 23B.13.210 through 23B.13.250 and any other applicable provision of the WBCA.

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3.3 Convertible Securities. At the Effective Time of the Merger, each outstanding warrant, option, or other security issued by Diego Washington that is exercisable for or convertible into shares of Diego Washington Stock shall be converted into and exchanged for a substantially similar security entitling the holder thereof to acquire that number of Diego Delaware's Common Stock that such security would have been exercisable for or convertible into had it been exercised, exchanged, or converted immediately prior to the Merger. For purposes of clarity, this Section 3.3 shall not apply to the Diego Washington Stock converted into and exchanged for Diego Delaware's Series A stock in the Merger pursuant to Section 33 above.

3.4 Certificates of the Surviving Company. At the Effective Time of the Merger, each certificate representing Diego Washington Stock or other securities of Diego Washington shall be deemed to evidence Diego Delaware's Common Stock or other securities of Diego Delaware for which such Diego Washington Stock or other securities were converted, subject to new or additional legends that Diego Delaware may require with respect to such certificates following the Effective Time of the Merger. Each holder of an outstanding certificate representing shares of Diego Washington Stock or other securities of Diego Washington may, at such holder's option, surrender the same for cancellation to Diego Delaware, and each such holder shall be entitled to receive in exchange therefor a certificate or certificates representing the number of Diego Delaware's Common Stock or other securities of Diego Delaware into which such holders' Diego Washington Stock or other securities were converted as herein provided. The registered owner on the books and records of Diego Delaware of any shares of Diego Washington Stock or other securities represented by such outstanding certificate shall, until such certificate shall have been surrendered for transfer or conversion or otherwise accounted for to Diego Delaware, have and be entitled to exercise any voting and other rights with respect to and to receive the distributions upon Diego Delaware's Common Stock or other securities represented by such outstanding certificate as provided above.

3.5 Legends. Each certificate representing shares of Diego Delaware's Common Stock so issued in the Merger shall bear the same legends, if any, with respect to the restrictions on transferability as the certificates of shares of Diego Washington Stock so converted and given in exchange therefor, unless otherwise determined by the board of directors of Diego Delaware in compliance with applicable laws.

3.6 Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of capital stock of Diego Delaware shall be subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of capital stock of Diego Delaware, the numbers of shares in 3.1 above shall, concurrently with the effectiveness of such subdivision, be proportionately increased or decreased.

4. General

4.1 Covenants of Diego Delaware.

(a) Diego Delaware covenants and agrees that it will reserve, and at all times prior to the Effective Time of the Merger, keep in reserve, enough shares of Diego Delaware's Common Stock to effectuate the Merger.

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(b) Diego Delaware covenants and agrees that, immediately following the Effective Time of the Merger, it will:

(i) Qualify to do business as a foreign corporation in the State of Washington and appoint an agent for service of process; and

(ii) Take such other actions as may be required by the Revised Code of Washington.

4.2 Covenants of Constituent Companies.

(a) The Constituent Companies each covenant and agree that all issuances of shares of capital stock or any equity equivalents will be for fair market value (as reasonably determined by such issuing company's board of directors), and that they will not waste any corporate assets.

(b) The Constituent Companies each covenant and agree that, prior to the Effective Time of the Merger, each Constituent Company's respective board of directors will not authorize or approve any cash dividends or distributions with respect to such Constituent Company's capital stock or equity securities.

(c) The Constituent Companies each covenant and agree to use commercially reasonable efforts to have all holders of their equity securities become bound by a drag-along provision substantially similar to that set forth in that certain Diego Pellicer Worldwide Inc. Voting Agreement dated effective as of September 27, 2013, as the same may be amended from time to time.

4.3 Further Assurances. From time to time, as and when required by Diego Delaware or by its successors or assigns, there shall be executed and delivered on behalf of Diego Washington such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other actions as shall be appropriate or necessary in order to vest or perfect in or conform of record or otherwise by Diego Delaware the title to and possession of all the property, interests, assets, rights, privileges, immunities, powers, franchises and authority of Diego Washington and otherwise to carry out the purposes of this Agreement, and the officers and directors of Diego Delaware are fully authorized in the name and on behalf of Diego Washington or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

4.4 Amendment. Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument referencing this Agreement and signed by each of the Constituent Companies.

4.5 Termination. This Agreement shall terminate on the date that is 5 years after the date of submission of the first Consummation Notice that is not rejected on the grounds that either party to this Agreement or any of their respective directors, officers, employees or stockholders is more likely to become subject to federal criminal charges, or be more likely to lose one or more of their licenses required to conduct business as a result of the consummation of the Merger than they would be if the Merger was not consummated.

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4.6 Registered Office. The address of Diego Delaware's registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19904, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

4.7 Agreement. Executed copies of this Agreement will be on file at the principal place of business of Diego Delaware at 3496 Fairview Way, West Linn, OR 97068 and copies thereof will be furnished to any member of either Constituent Company, upon request and without cost.

4.8 Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

4.9 Independent Counsel. Each of the parties hereto have had the opportunity to engage independent counsel and affirm that they have satisfied themselves as to the fairness of this agreement and hold the firm Carincross and Hempleman harmless as to their involvement with the crafting of this agreement.

(signature page follows)

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The undersigned authorized representatives of each of the Constituent Companies have executed and acknowledged this Agreement as of the date first set forth above.

	DIEGO PELLICER WORLDWIDE INC., a Delaware corporation

	By:
		Name: Ron Throgmartin
		Title: Chief Executive Officer

	DIEGO PELLICER, INC., a Washington corporation

	By:
		Name: Peter Norris
		Title: Chief Executive Officer

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Exhibit 10.6

Execution Version

CANCELLATION AGREEMENT

This CANCELLATION AGREEMENT (this “Agreement”), dated _____ ___, 2015 (the “Effective Date”), by and among DIEGO PELLICER WORLDWIDE, INC. (f/k/a Type I Media, Inc.) (the “Company”), a Delaware corporation, and JONATHAN WHITE, individually (the “Shareholder”). Company and Shareholder are also hereinafter individually and jointly referred to as “P(p)arty” and/or “P(p)arties”.

RECITALS

WHEREAS, as of the date hereof, the Shareholder is the owner of 55,000,000 shares of the Company’s commons stock, par value $0.000001 per share (the “Common Stock”); and

WHEREAS, concurrently herewith, Company and the Shareholder are entering into an ‘Merger Agreement’ (“Merger Agreement”) with Diego Pellicer World-wide, Inc., a Delaware corporation (“Diego”), pursuant to which Company and the Shareholder will cancel 55,000,000 shares of Common Stock Cancellation Shares (“Cancellation Shares”) Cancellation Shares in exchange for the consummation of the Merger Agreement and $169,000 (“Cancellation Payment”); and

WHEREAS, it is a condition precedent to the consummation of the Merger Agreement that the Shareholder will enter into this Agreement, which will effectuate the cancellation of the Cancellation Shares; and

WHEREAS, the Shareholder is entering into this Agreement to, amongst other things, induce Diego to enter into the Merger Agreement and the Shareholder acknowledges that Diego would not consummate the transactions contemplated by the Merger Agreement unless the transactions contemplated hereby are effectuated in accordance herewith.

AGREEMENT

In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

1. Cancellation of Cancellation Shares. On the Effective Date, the Shareholder will deliver to Company the necessary documentation for the cancellation of the stock certificates representing the Cancellation Shares, along with duly executed medallion guaranteed stock powers covering the Cancellation Shares (or such other documents acceptable to the Company’s transfer agent) and hereby irrevocably instructs the Company and the Company’s transfer agent to cancel the Cancellation Shares such that the Cancellation Shares will no longer be outstanding on the stock ledger of the Company and such that the Shareholder shall no longer have any interest in the Cancellation Shares whatsoever. The Company shall immediately deliver to the Company’s transfer agent irrevocable instructions providing for the cancellation of the Cancellation Shares.

Execution Version

2. Effective Date. This Agreement shall become effective upon the execution of this Agreement. The transactions to occur at such place and time with respect to this Agreement are referred to herein as the “Closing”.

3. Waiver. At and subsequent to the Closing, the Shareholder hereby waives any and all rights and interests he has, had or may have with respect to the Cancellation Shares.

4. Representations by the Shareholder. (a) The Shareholder owns the Cancellation Shares of record and beneficially free and clear of all liens, claims, charges, security interests, and/or encumbrances of any kind whatsoever. The Shareholder has sole control over the Cancellation Shares and/or sole discretionary authority over any account in which they are held. Except for this Agreement, no person/entity has any option or right to purchase or otherwise acquire the Cancellation Shares, whether by contract of sale or otherwise, nor is there a “short position” as to the Cancellation Shares.

(b) The Shareholder has full right, power and authority to execute, deliver and perform this Agreement and to carry out the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid, binding obligation of the Shareholder, enforceable against it in accordance with its terms (except as such enforceability may be limited by laws affecting creditor's rights generally).

(c) The Shareholder represents and warrants that it has the requisite authority and capacity to enter into this Agreement, as well as carry out the terms/conditions referenced herein. Additionally, Shareholder represents and warrants that its compliance with the terms and conditions of this Agreement and will not violate any instrument relating to the conduct of its business, or any other agreement which it may be a party, or any Federal and State rules or regulations applicable to either Party.

6. Further Assurances. Each Party to this Agreement will use its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including the execution and delivery of such other documents and agreements as may be necessary to effectuate the cancellation of the Cancellation Shares).

7. Entire Agreement; Amendments. This Agreement contains the entire understanding of the Parties with respect to the matters covered herein and therein and, except as specifically set forth herein, neither the Company nor the Shareholder makes any representation, warranty, covenant or undertaking with respect to such matters. No amendment, modification, termination or waiver of any provision of this Agreement, and no consent to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by both Parties. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

8. Survival of Agreements, Representations and Warranties, etc. All representations and warranties contained herein shall survive the execution and delivery of this Agreement.

9. Successors and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

Execution Version

10. Governing Law. This Agreement and the obligations, rights and remedies of the Parties hereto are to be construed in accordance with and governed by the laws of the State of Delaware, with any action/dispute concerning this Agreement to be commenced exclusively in the state and federal courts sitting in the City of New York.

11. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

12. Miscellaneous. This Agreement embodies the entire agreement and understanding between the Parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. If any provision of this Agreement shall be held invalid or unenforceable for whatever reason, the remainder of this Agreement shall not be affected thereby and every remaining provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. This Agreement may be executed in any number of counterparts and by the Parties hereto on separate counterparts but all such counterparts shall together constitute but one and the same instrument.

Execution Version

IN WITNESS WHEREOF, the Parties hereto have executed this Cancellation Agreement as of the date first above written.

	DIEGO PELLICER WORLDWIDE, INC. (f/k/a Type I Media, Inc.)

	By:	/s/ Jonathan White
	Name:	Jonathan White
	Title:	President

	By:	/s/ Jonathan White
	Jonathan White, Individually

Exhibit 10.7

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into by and between: Shamira. LLC whose address is 8051 NW 159^th Terrace. Miami Lakes. FL 33016 as Landlord, and Diego Pellicer Worldwide, Inc a Delaware Corporation, as Tenant, which is liable for all provisions, covenants and obligations hereunder.

Landlord wishes to lease to Tenant and Tenant wishes to lease from Landlord, certain real property, further identified and defined herein. (Landlord and Tenant, together, herein sometimes referred to as the "Parties").

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, and under the warranties, representations, conditions and covenants herein, the Parties agree to the following:

W I T N E S S E T H:

Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, upon the terms and conditions as hereinafter set forth, premises described as follows:

L 1 TO 10 INC & FRACTL L 11 LYG NLY UP ROW BLK 66 1ST ADD TO SWANSEA

Also known as
4242 Elizabeth Street Denver CO 80216

Together with all rights privileges, easements, appurtenances and Amenities to or in any way pertaining to the premises and together with the buildings and other improvements situated upon said premises (said real property, buildings and improvements hereinafter referred to as the "premises"). Equipment will be included in this Lease agreement which will be listed and attached as Exhibit A.

Base Term. To have and to hold the same for a term of (5) years commencing on the First day of July, 2014 until June 30, 2019 with a Five (5) year extension which must be exercised no less than 60 days prior to the end of the first lease period.

Base Rent. Tenant hereby agrees to pay to Landlord. Rent as Follows:

Base Rent: D0,000.00 per month for 18,566 sqft plus NNN. The NNN Shall be $ 1771.00 per month approximate. The base rent shall increase by 3% per year throughout the initial 5 year term August 2014 and September 2014 shall be Rent Free.

Lease period	Monthly rent	Annual Rent
Year 1	$30,000.00 + NNN	$360,000 + NNN
Year 2	$30,900.00 + NNN	$370,800 + NNN
Year 3	$31,827.00 + NNN	$381,924 + NNN
Year 4	$32,781.81 + NNN	$393,382 + NN
Year 5	$33,765.26 + NNN	$405,183 + NNN

The Payment, Plus "NNN" expenses shall be payable in equal monthly installments as listed in the schedule above, in advance without notice on the first day of each month during said term, at the offices of Landlord located at_____________________________________________ (or at such other place as Landlord may designate in writing from time to time) without any set-off or deduction whatsoever ("Base Rent").

Said payments shall be in legal tender and lawful money of the United States. If the term herein commences on a day other than the first day of a calendar month, then Tenant shall pay to Landlord the rent for the number of days that exist prior to the first of the succeeding month, with a similar adjustment being made at the termination of this Lease, if necessary. If Tenant exercises its option to renew for an additional Five (5) year term, the Base Rent and estimated NNN expenses shall increase three (3%) annually over the last year rate of the initial term.

Tenant shall tender to Landlord a payment of First Month's Payment:	$	30,000.00
Last 2 Month’s:	$	60,000.00
Security Deposit:	$	60,000.00
Total of Initial payment	$	150,000.00

The initial payment consists of first month's payment, two month’s rent for security deposit and .last month's. Landlord shall not be obligated to pay interest on the security deposit. Tenant shall begin payments on July 1, 2014. Landlord shall have the right to commingle such security deposit with other funds of Landlord. The portion of the deposit not held back for damage done to the space shall be refunded within 30 days of the end of Tenant's lease.

Additional Rent. All rent not defined. as base rent shall he considered "Additional Rent". In addition to the Base Rent specified above, Tenant shall pay to the Landlord an amount which Landlord shall Estimate for the cost of all personal property and real property (real estate) taxes and assessments attributable to the building and the operation thereof, all insurance as specified in this Lease and all maintenance of the building in order to keep it in good operational condition, this rent is also called NNN. The sum of the expenses shall be estimated by Landlord each year and divided by 12 then divided by three (3 units) and Tenant shall pay such rent along with his base rent. Landlord shall also be entitled to such other sums due in excess of the base rent which shall also be titled Additional Rent as specified in the Lease. As of the signing of this lease annual real estate taxes are to be determined at the beginning of each calendar year.

NNN Items. Included in the NNN items are all expenses related to the operation of the building, including ail taxes levied against the building, insurance and maintenance, legal and professional fees, charges by any city authority, sidewalk improvements, and any other expense not considered a capital expense incurred by Landlord in operating the property. In addition, in the event the actual NNN Expenses exceed the budgeted NNN Expense payments, Tenant shall pay the difference within thirty (30) days of written notice by Landlord. Landlord will give the appropriate credit if the budgeted NNN Expense exceeds the actual.

In addition, Tenant shall be responsible for obtaining and maintaining insurance sufficient to protect Landlord as outlined below. In the event the NNN charges have been underestimated by Landlord, he may present a bill to Tenant and Tenant shall pay such bill within 10 days.

Exclusions from NNN items. None

Maintenance Portion of NNN Items included.

Tenant, shall perform maintenance on the building and therefore avoid payment of the maintenance portion of the NNN directly to Landlord. To the extent Tenant fails to perform the maintenance of the property Landlord may perform such maintenance and bill Tenant for the cost of same.

If Lessee fails to perform Lessee's obligations under this section Lessor or his agents or contractors may at Lessor's option enter upon the Premises, after ten (10) days' prior written notice to Lessee. and put the same in good order, condition and repair. and the cost thereof together with interest thereon at the rate of 18% per annum shall be due and payable as additional rent to Lessor together with Lessee's next rental installment. Landlord shall be entitled to a fee of 20% of the cost of any repairs or maintenance performed by Landlord.

Insurance Portion of NNN Items.

All-Risk Insurance. In the name of the Landlord, Tenant shall keep all improvements located on or appurtenant to the Premises insured against loss or damage by fire and such other perils as are now or hereafter included in the standard "All-Risk" policy in common use for commercial structures, including vandalism and malicious mischief. The amount of the All-Risk insurance shall be equal to one hundred percent (100%) of the then actual replacement cost of existing improvements, estimated at $370,000.00, including the value of any leasehold improvements or betterments but excluding costs of replacing excavations and foundations, but without deductions for depreciation. Landlord may, on each anniversary date of this Lease, request the carrier of the insurance (or the agent for the carrier) to determine the amount of insurance required by the provisions of this paragraph, and the resulting determination shall be conclusive between the parties. Upon Landlord's request, Tenant shall include the holder of any mortgage encumbering the Premises by virtue of a standard mortgagee's clause to the extent of that mortgagee's interest. In addition to the insurance set forth above, Tenant shall provide Rental Income Insurance (loss of rents insurance) in the name of Landlord in an amount sufficient to cover the full Base Rent as well as all other payments which are the responsibility of Tenant under the terms and conditions of this Lease. Further, if there is a boiler or similar equipment on the Premises, Tenant shall provide a separate policy covering boiler explosion, together with rental income insurance resulting from a boiler explosion. In lieu of Tenant acquiring the insurance as above set forth, Landlord shall have the exclusive right to purchase the insurance required by the provisions of this subsection 6(a) in Landlord's name and to forward Tenant a bill for the premium for such insurance. Tenant shall pay said bill within ten (10) calendar days after receipt of the same. Landlord, at his option, may arrange for insurance acceptable to Landlord covering the structure and include same in the NNN expenses.

Liability Insurance. Tenant shall at all times keep in force a comprehensive general combined liability insurance policy providing protection of at least $2,000,000 against claims and liability for personal injury, bodily injury, death and property damage arising from the use, ownership, maintenance, disuse or condition of the Premises, any improvements located on or appurtenant to the Premises, improvements or adjoining areas or ways. Landlord shall be named and protected under the terms and conditions of said policy as Landlord of the Premises.

Personal Property. Tenant shall be responsible for insuring any and all personal property that may be owned by Tenant. Any insurance that may be purchased pursuant to this section 6 or any proceeds that may be payable as a result of a loss under any such insurance shall in no way reduce, alter, diminish or modify any provisions of this Lease and specifically the indemnity provisions of section 11 hereof.

Forfeiture and Seizure. Tenant shall carry insurance which protects and covers Landlord in the event the building is seized, or subject to asset forfeiture. All insurance required by virtue of this section 6 shall be written with an insurance company licensed to do business in the State of Colorado and approved by Landlord (which approval shall not be unreasonably withheld), with such policies to be non-assessable. Tenant shall provide Landlord with the original insurance policies or a Certificate of Insurance (with proof of payment thereon), which shall provide that the insuring company shall give notice in writing to Landlord thirty (30) calendar days prior to cancellation, termination or, in the event of a material change in such insurance, for any reason whatsoever. An endorsement shall provide that any proceeds (except liability insurance proceeds) of any loss shall be payable to Landlord and Tenant as their respective interests may appear, except that in the event Landlord purchases the All-Risk Insurance, then any loss shall be payable to Landlord.

Surrender. On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, broom clean, ordinary wear and tear excepted. Lessee shall repair any damage to the Premises occasioned by the removal of its trade fixtures, furnishings and equipment.

Hold Over. Any rule or law to the contrary notwithstanding, in the event Tenant remains in possession of the Premises or any part thereof subsequent to the expiration of the term of this Lease or any extension thereof and such holding over shall be with the consent of Landlord, it shall be conclusively deemed that such possession and occupancy shall be a tenancy from month-to-month only. at a rental which was existing at the end of the term of this Lease or any extension thereof, unless increased by Landlord upon not less than 30 days' prior written notice, and, further, such possession shall be subject to all of the other terms and conditions (except any option to renew or option to purchase) contained in this Lease. In the event Tenant otherwise Holds Over. Tenant shall pay to Landlord the sum of 150% of the rent.

Inspection and Acceptance of Premises. Tenant acknowledges that it has inspected or has had opportunity to inspect and accepts the premises in its condition as suitable for the purpose for which the premises are leased to the Tenant. Taking of possession by Tenant shall be deemed conclusively to establish that said premises are in good and satisfactory condition as of when possession was taken. Tenant further acknowledges that no representations as to the repair of the premises. nor promises to alter. remodel or improve the premises have been made by Landlord, unless such are expressly set forth in the lease. If this lease is executed before the premises become vacant or otherwise available and ready for occupancy. or if any present tenant or occupant of the premises holds over, and Landlord cannot acquire possession of the premises prior to the date above recited as the commencement date of this lease, Landlord shall not be deemed to be in default hereunder, and Tenant agrees to accept possession of the premises at such time as Landlord is able to tender the same, which date shall thenceforth be deemed the "commencement date"; and Landlord hereby waives payment of rents covering any period prior to the tendering of possession to Tenant hereunder. After the commencement date Tenant shall, upon demand, execute and deliver a letter of acceptance of delivery of the premises. Tenant specifically accepts the premises as follows: Leased premises shall be as is where is. Tenant shall he responsible for their own electric bill and shall be due monthly.

Use of Premises. Tenant shall have the right to use and occupy the Premises for the following purposes and no other which is a marijuana operation, legal under the constitution of the State of Colorado or permitted by Colorado law. Tenant asserts he will not sell any product in the property which is illegal for sale. Tenant shall not use any portion of the premises outside of the building structures to sell products, including the yard, patios, driveways and sidewalks. Tenant shall grow marijuana under the approved laws of the state of Colorado. Tenant shall not, on September, open a retail store to public for the sale of medical or recreational marijuana or dispensary of any kind.

Expansion of Use. In the event Tenant seeks to expand the use of the Premises, Tenant shall advise Landlord and Landlord and Tenant shall negotiate such additional sums which may be due for such expansion of Tenant's business, if any.

Tenant's Additional Obligations. Tenant covenants, throughout the term of this Lease and at Tenant's sole cost and expense, to promptly comply with all laws and ordinances and the orders, rules, regulations and requirements of all state and municipal governments, special districts and all appropriate departments, commissions, boards and officers thereof.

Assignment and Subleasing, Neither this Lease nor any interest herein may be assigned by Tenant, voluntarily or involuntarily, by operation of law or otherwise, and neither all nor any part of the Premises shall be subleased by Tenant without the written consent of Landlord first had and obtained. Any consent to assignment or sublease given by Landlord shall not constitute a waiver of necessity for such consent to a subsequent assignment or sublease. In the event, upon application by Tenant and sub-lessor, Landlord approves the Sub-lessor, Tenant shall remain fully liable under the terms and conditions of this Lease and shall not be released from performing any of the terms, covenants and conditions hereof. In addition to Tenant, any sub lessee or assignee shall be personally liable for all payments, conditions, covenants and agreements in this Lease. Any subleasing or assignment in violation of this paragraph shall be null and void. Landlord shall be entitled to a reasonable fee for his time and effort in reviewing the new tenant's credit and use of the property upon application for subleasing. Landlord shall not unreasonably withhold approval of a sublease, and may take into consideration the Sub-lessor's prospective use of the property. his business experience, his capital resources and his credit rating.

The Landlord authorizes the Premises to be sublet to licensed medical and/or recreational marijuana growers, processors and/or retailers, including DPCO. Inc (the "Subtenant"), and those affiliates of subtenant controlled by or under direct common control of subtenant. Tenant shall have the right to replace the Subtenant with Landlord's approval, which approval shall not be unreasonably withheld; however Tenant shall remain responsible for all terms and conditions of this Lease. Notice shall include name and contact information of the new Subtenant and proof of licensing approval from the MMED and City of Denver. New Subtenants must meet all other requirements of this Lease.

Utilities. Tenant shall promptly pay all charges for water, sewer, heat, gas, light, electricity, and any and all other utilities used on or in connection with the operation and maintenance of the Premises.

Indemnity Provisions. Tenant agrees to exonerate, save harmless, protect and indemnify Landlord, or any owner of the Premises, from and against any and all losses, damages, claims, suits or actions, judgments and costs which may arise during the term hereof for personal injury, loss of life or damaged property sustained in or about the Premises or the improvements and appurtenances thereto or upon the adjacent sidewalks and streets and from and against all costs, attorney fees, expenses and liabilities incurred in, as a result of and about any such claims, the investigation thereof or the defense of any action or proceeding brought thereon, and from and against any judgments, orders, decrees or liens resultant there from and any fines levied by any authority for violation of any law, regulation or ordinance by virtue of the use of the improvements and appurtenances thereto situated upon the Premises. This indemnity shall include any loss from the filing of mechanic's and/or material men's liens.

Occupational Safety and Health Act. Tenant shall fully comply with the Occupational Safety and Health Act of 1970 (as amended) (Chapter XVII, Title XIX of the United States Code) (OSHA) or applicable state statute adopted pursuant to OSHA. It shall be Tenant's obligation to fully comply with the provisions and standards as contained in said Act (or as the same may be amended) and Tenant shall hold Landlord harmless from any obligations or responsibilities, if any, created under said OSHA or other applicable federal or state statute. Further, Tenant shall be responsible to make any and ail repairs and alterations to the structural and non-structural components of the Premises, or to any appurtenances situated upon the Premises that may be required of Landlord as provided in any OSHA or any other statute, law or ordinance in effect at the time of the execution of this Lease or which may hereafter be enacted.

Care of the Premises. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Premises. At the termination of this Lease, by lapse of time or otherwise, Tenant shall deliver up the Premises to Landlord in as good condition as at date of possession by Tenant ordinary wear and tear excepted; and Tenant shall remove all of Tenant's trade fixtures, furniture and other effects. All movable furniture and other effects not so removed shall conclusively he deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or any other person and without obligation to account therefore, and Tenant shall pay Landlord all expenses incurred in connection with such property. Tenant's obligation to observe or perform this covenant shall survive the termination of this Lease.

Tenant shall pay before delinquency all taxes, assessments, license taxes and other charges levied. assessed or imposed upon Tenant's operation, occupancy or conduct of business at the Premises or upon Tenant's equipment, furniture, trade fixtures, leasehold improvements and other personal property of any kind installed or located on the Premises. which become payable during the term of this Lease.

Alterations to Premises. Tenant shall have the right. at is sole cost and expense, to make changes or alterations to the Premises upon written approval of Landlord. Tenant may, without written approval, change the flooring in the Premises at Tenant's expense, may paint the interior and remove or change the dividers currently on the floor. In the event Tenant removes the existing tile on the floor, he shall place new floor coverings such that, in the event of removal of any dividers, the floor remains intact and as one floor, without holes or vacant spots where the dividers are placed.

Tenant shall make no alterations in or additions or repairs to the Premises without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld; and Tenant shall notify Landlord at least ten (I0) business days in advance of any alterations in or repairs or additions to the Premises which Tenant proposes to make. Tenant shall post notice pursuant to the Colorado Mechanics Lien Act so that any lien recorded against the property of which the Premises are a part does not attach to Landlord's interest.

All such alterations, additions or improvements shall be made at Tenant's sole cost and expense and, except for furniture and trade fixtures, shall become the property of Landlord and shall be surrendered with the Premises, as a part thereof, at the end of the term hereof. Landlord may require Tenant to remove all such improvements installed by the Tenant and to repair any damage to the Premises from such removal. Tenant shall construct such improvements, alterations or repairs in conformance with any and all applicable rules and regulations of any Federal. State, or Municipal or special authority code or ordinance. At least ten (10) days before the commencement of any such work, Tenant agrees to provide Landlord with lien waivers from all persons performing such work and material men providing materials used in connection therewith. In the event Tenant orders any construction, alterations, decorating or repair work directly from Landlord, the charges for such work shall be payable to Landlord upon satisfactory completion of such work. If not paid when invoiced, such nonpayment shall be deemed an event of default hereunder. In the event any lien shall be filed for labor performed or materials supplied, Tenant shall cause such lien to be released within thirty (30) days. Failure to do so will be considered a material breach of this Lease Agreement.

In all cases any changes or alterations shall conform to all building and zoning regulations, and shall be performed in a workman like manner, with all building permits which may be required by the city or state being obtained by the Tenant, and the follow up inspections completed including final inspections by the appropriate authorities. Further, Tenant shall be responsible for any costs pertaining to the City and County of Denver's mandatory frontage paint and or color requirements. Tenant shall be responsible for their own signage which must adhere to the City and County of Denver's Signage control policy.

Condemnation. Complete Taking. lf, during the term of this Lease, or any extension hereof, the whole or substantially all of the Premises shall be taken as a result of the exercise of the power of eminent domain or transferred under threat of condemnation, this Lease shall terminate as of the date of vesting of title of the Premises or delivery of possession, whichever event shall first occur, pursuant to such proceeding or transfer. For the purpose of this section 15. "substantially all of the Premises" shall be deemed to have been taken if a taking under any such proceeding shall involve such an area, whether the area be improved with building or be utilized for a parking area or for other use, that Tenant cannot reasonably operate in the remainder of the Premises the business being conducted on the Premises at the time of such proceeding.

Partial Taking. If, during the term of this Lease, or any extension hereof, less than substantially all of the Premises shall be taken in any such proceeding, this Lease shall not terminate. The rent thereafter due and payable by Tenant shall be reduced in such proportion as the nature, value and extent of the part so taken bears to the whole of the Premises. Landlord shall, from the proceeds of the condemnation, restore the Premises for use of Tenant.

Award. Any award granted for either partial or complete taking regarding the Premises shall he the sole property of Landlord.

Destruction of Premises. If any building or improvement standing or erected upon the Premises shall be destroyed or damaged ("Damage") in whole or in part by fire or other casualty, Landlord shall promptly repair. replace or rebuild ("Restoration") the same at least to the extent of the value and as nearly as practical to the character of the Building or improvements existing immediately prior to the Damage. During such Restoration, Tenant shall be entitled to a proportionate reduction of rent while such Restoration work is being completed, such proportionate reduction to be based upon the extent to which such Restoration interferes with Tenant's use of the Premises. If: (a) the Premises are encumbered by a mortgage or deed of trust ("Mortgage") and the holder of the Mortgage requires that all or a portion of the proceeds of the insurance be paid to said holder, or (b) the insurance proceeds available for the Restoration are less than 90 percent of the cost of the Restoration, or (c) the Restoration cannot be completed within 120 days, then Landlord may, at its option, declare this Lease terminated and all parties shall be relieved from further obligation hereunder from the Date of the Damage. If the Restoration cannot be completed within 120 days from the date of the Damage, then Tenant shall likewise have the right, at its option, to declare this Lease terminated and all parties shall be relieved from further obligation hereunder from the date of the Damage. In the event that either Landlord or Tenant is entitled to declare this Lease terminated as set forth above, than such notice shall be given within thirty (30) calendar days from the date of determination that the Restoration cannot be completed within 120 days by the party declaring such to the other party.

Anything in this section 17 to the contrary notwithstanding, if the improvements contained on the Premises are substantially damaged or destroyed from any cause whatsoever during the last eighteen (18) month period of this Lease, Landlord may, at its option, declare this Lease terminated and all parties shall be relieved from further obligation hereunder from that date of said damage. However, if an option to extend the term of this Lease is granted herein, then if Tenant exercises said option within twenty (20) calendar days from the date of Damage and if the remaining term plus the option period is for a period of time longer than eighteen (18) months, Restoration and the parties' obligations and rights shall be as set forth in the preceding paragraph. All insurance proceeds paid as a result of a casualty shall be the sole and exclusive property of the Landlord.

Default. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant:

Tenant failing to pay Base Rent or Additional Rent within Ten days of its due date;

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

Tenant 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 Landlord or if such default is a default which cannot be cured within a 30 calendar day period, then Tenant'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 Landlord or to the Tenant, the time for cure shall conform to the time granted by such governing authority, including any time granted by any tribunal.

Tenant abandoning the Premises.

Tenant 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 Tenant unless said involuntary bankruptcy is terminated within thirty (30) calendar days from the date of said filing, or Tenant filing in any court for the appointment of a receiver or trustee of all or a portion of Tenant's property or there being appointed a receiver or trustee for ail or a portion of Tenant's property, unless said receiver or trustee is terminated within thirty (30) calendar days from the date of said appointment; Tenant making any general assignment or general arrangement of its property for the benefit of its creditors.

In the event of an occurrence of default as set forth above, Landlord shall have the right to: Terminate this Lease and end the term hereof by giving to Tenant written notice of such termination, in which event Landlord shall be entitled to recover from Tenant at the time of such termination the present value of the excess, if any, of the amount of rent reserved in this Lease for the then balance, not to exceed 6 months, hereof over the then reasonable rental value of the Premises for the same period. The present value shall be determined by discounting all future excess rent amounts at the rate of eight percent (8%) per annum. It is understood and agreed that the "reasonable rental value" shall be the amount of rental which Landlord can obtain as rent for the remainder of the initial term or renewal term, whichever is applicable; or without resuming possession of the Premises or terminating this Lease, to sue monthly for and recover all rents, other required payments due under this Lease, not to exceed 6 months, and other sums including damages and legal fees at any time from time to time accruing hereunder; or without terminating this Lease, re-enter and take possession of the Premises or any part thereof and repossess the same as of Landlord's former estate or expel Tenant and those claiming through or under Tenant and remove the effects of both or either (forcibly, if necessary) without being, deemed guilty in any manner of trespass and without prejudice to any remedies for rent delinquencies or preceding lease defaults, in which event Landlord may from time to time without terminating this Lease re-let the Premises or any part thereof for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord may, in its sole discretion, deem advisable. with the right to make alterations and repairs to the Premises, and neither the serving of a demand for possession nor the re-entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of termination be given to Tenant. In the event of Landlord's election to proceed under this subsection (c), then such repossession shall not relieve Tenant of its obligation and liability under this Lease, ail of which shall survive such repossession, and Tenant shall pay to Landlord as current damages the basic rental and other sums hereinabove provided which would be payable hereunder if such repossession had not occurred, less the net proceeds (if any) of any re letting of the Premises after deducting all of Landlord's expenses in connection therewith, including but without limitation all repossession costs, brokerage commissions, legal expenses, attorneys' fees, expenses of employees, alteration costs and expenses of preparation of such re letting. Tenant shall pay such current damages to landlord on the days on which the basic rent would have been payable hereunder and as if possession had not been retaken, and Landlord shall be entitled to receive the same from Tenant on each such day. Any Late Payment shall bear a penalty of $200.00.

Subordination and Estoppel. This Lease is subject and subordinate to all mortgages and deeds of trust which now or hereafter may affect the Premises, and Tenant shall execute and deliver upon demand of Landlord any and all instruments desired by Landlord subordinating this Lease in the manner requested by Landlord to any new or existing mortgage or deed of trust. Should Tenant fail to execute and deliver any such documents or instruments within ten (10) calendar days after receipt of such demand, Tenant irrevocably constitutes and appoints Landlord as Tenant's special attorney-in-fact for the purpose solely of executing and delivering any such documents or instruments pursuant to this paragraph. Any holder of a mortgage or deed of trust may rely upon the terms and conditions of this paragraph. Further, Tenant shall at any time and from time to time, upon not less than five (5) calendar days' prior written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying, that this Lease as so modified is in full force and effect) and the dates to which rental and other charges are paid in advance, if any, and acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord, or specifying such defaults, if any are claimed. Tenant shall attorney to any purchaser at any foreclosure sale or to any grantee or transferee designated in any deed given in lieu of foreclosure. Any subordination agreement to be executed by Tenant shall provide that as long as Tenant is current and not in default under the terms and conditions of this Lease, the holder of the mortgage shall not disturb the tenancy of Tenant.

Hazardous Use. Tenant shall not occupy or use. or permit any portion of the Premises to be occupied or used for any business or purpose which is unlawful, disreputable or deemed to be extra hazardous, or permit anything to be done which would in any way increase the rate of casualty or liability insurance coverage on the Premises or the Building and/or its contents. Tenant will not store, create or use any Hazardous Materials (as they are defined in section 21, below) on or about the Premises without the prior written consent of Landlord, which approval may be withheld at Landlord's discretion. With respect to any such storage, creation or use of Hazardous Materials, Tenant agrees to use, store, and dispose of same as required by applicable local, state and federal laws; to provide immediate notice of any releases; to provide in advance the identity of specific Hazardous Materials which will be stored, created or used on the Premises; and to maintain the Premises free of contamination and return the property to its pre-lease condition.

Indemnification. Tenant and all other signatories and guarantors hereof jointly and severally agree to indemnify, protect and save Landlord harmless against and from any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands. defenses, judgments, suits. proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, attorneys' and experts' fees and disbursements) which may at any time be imposed upon, incurred by or asserted or awarded against Landlord, and arising from or out of any Hazardous Materials, as hereinafter defined, hereafter located upon or within all or any portion of the Premises as a result of Tenant's actions, including without limitation (i) the cost of removal of all such Hazardous Materials from all or any portion of the Premises, (ii) additional costs required to take necessary precautions to protect against the release of Hazardous Materials on, in, under or affecting the Premises, into the air, any body of water, any other public domain or any surrounding areas, and (iii) costs incurred to comply, in connection with all or any part of the Premises, with all applicable laws, orders, judgments and regulations with respect to Hazardous Materials.

For the purposes of this Lease, the term "Hazardous Materials" shall mean any hazardous or toxic materials, wastes and substances including any substance identified in CERCLA, RCRA, or other federal, state or local legislation, regulations or ordinances whether now existing or hereafter enacted or promulgated or any judicial or administrative interpretation of such laws, rules or regulations.

This Indemnification shall be a continuing indemnity for 6 months and shall remain in full force and effect until released and cancelled by Landlord or its successors and assigns.

Subrogation. Landlord shall cause each insurance policy carried or to be carried by Landlord insuring the Premises against loss, and Tenant shall cause each insurance policy carried or to be carried by Tenant on or relating to the Premises, its fixtures and contents, to be written in a manner so as to provide that the insurance company waives all right to recovery by way of subrogation against damage covered by any such policies (but only with respect to claims against the other party.) Neither party, its agents, officers and employees shall be liable to the other for any loss or damage caused (regardless of cause or origin, including the negligence of any party hereto, its agents, officers or employees) by fire or any other risk or risks against which any such policy insures, provided such waiver was obtainable. If the release of either Landlord or Tenant as set forth herein shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released but shall be secondary to that of the other party's insurer. Notwithstanding anything contained herein to the contrary, any insurance policies maintained by Tenant (Public Liability and Personal Property) shall name Landlord as an additional insured.

Surrender of Premises. Upon expiration or termination of the term of this Lease, or any extension thereof, Tenant shall peaceably and quietly leave and surrender the Premises in as good condition as they are now, ordinary wear and tear excepted. Tenant shall surrender and deliver up the building and Premises broom-clean and free of Tenant's property. Provided Tenant is not in default, it shall have the right to remove all of its trade fixtures, equipment, machinery and other personal property, provided that upon such removal the Premises are delivered in the same condition as existed at the time of commencement of this Lease. Further, in the event Tenant does not remove any of its fixtures, equipment or personal property or any additions or alterations made to the Premises during the term of this Lease, Landlord may, at its option, require Tenant to remove any such improvements, alterations, fixtures and equipment and restore the Premises to the condition that existed at the commencement of the Lease, at Tenant's sole cost and expense. or retain the same.

Recommendation of Legal Counsel. Landlord advises and recommends that all parties hereto obtain legal counsel to represent them in connection with the examination of title, zoning of the Premises, the contents and execution of this Lease, tax implications of the transaction and all other aspects relative to the transaction contemplated hereby.

Notices. All notices, demands and requests required to he given by either party to the other shall be in writing and shall be hand delivered or sent by certified or registered mail, return receipt requested. postage prepaid, addressed to the party at the address set forth below or at such other addresses as the parties may designate in writing delivered pursuant to the provisions hereof. Any notice when given as provided herein shall be deemed to have been delivered on the date personally served or two (2) banking days subsequent to the date that said notice was deposited with the United States Postal Service. Landlord address: 535 Dover Street Lakewood Co 80226-1149.

Time is of the Essence. Time is of the essence hereof.

Quiet Enjoyment. Landlord represents and warrants that Landlord has the right to enter into and make this Lease: and Tenant, upon paying the rent herein reserved and upon performing all of the terms and conditions of this Lease on its part to be performed, shall at all times during the term herein demised peacefully and quietly have, hold and enjoy the Premises.

Acceptance of Premises. Tenant accepts the Premises subject to all zoning ordinances and regulations pertaining to the Premises, without responsibility or warranty by Landlord, and further Tenant accepts the Premises subject to easements, rights-of-way, restrictive covenants and reservations of record.

Right to Inspect or Show Premises. Landlord, or Landlord's agent and representative. shall have the right to enter into and upon the Premises or any part thereof at all reasonable hours for the purpose of examining the same. Landlord, or Landlord's agent and representative, shall also have the right to show the Premises to persons wishing to purchase or lease the same at all reasonable hours. During the 90 calendar day period prior to the expiration of this Lease, or any extension thereof, Landlord, or Landlords agent and representative, shall have the right to place "to let" or "for sale" notices on the Premises, and the Tenant agrees to permit the same to remain thereon. Landlord will observe and follow all marijuana laws and regulations as defined by state and local regulations.

Severability. If any sentence, paragraph or article of this Lease is held to be illegal or invalid, this shall not affect in any manner those other portions of the Lease not illegal or invalid and this Lease shall continue in full force and effect as to those provisions,

Confidentiality and Nondisclosure. Both Parties agree not to disclose the confidential information obtained from the discloser and this Lease to anyone unless required to do so by law. In consideration of each Party's disclosure of Confidential Information to the other Party, each Party agrees with respect to the Confidential Information received from the other Party, that it: (a) will maintain such Confidential Information in the strictest confidence; (b) will not disclose, transfer or otherwise make available any of such Confidential Information to any third party without the prior written consent of the other Party; and (c) will not use the Confidential Information for any purpose other than related to this letter. Each Party shall take reasonable measures to protect the Confidential Information of the other Party. Those measures shall not be less than the measures taken to protect the receiving Party's own confidential information. Confidential Information of the other Party may be provided to a Party's Representatives only on a need-to-know basis, and prior to such provision, the Party will notify each Representative to whom such disclosure is made that such Confidential Information is received in confidence and shall be kept in confidence by such Representative. Neither Party may disclose Confidential Information to current or previous employees without the prior consent of the other party.

If at any time during the term of the Lease Landlord receives an offer from a third party to purchase the Premises which Landlord wishes to accept. Landlord shall deliver to Tenant a copy of the complete proposed contract received and allow Tenant to purchase the Premises under the same terms and conditions.

If Federal, Colorado or Denver laws or regulations prohibit the Tenant's operation of a marijuana operation at this location during the term of this Lease or if a governmental notice is delivered to Landlord or Tenant which requires the cessation of marijuana cultivation or infusion on the Premises, Landlord or Tenant may terminate this Lease with no penalties and Tenant shall vacate the Premises within 30 days, any deposits shall forthwith be returned by Landlord to Tenant.

If Premises' location or Tenant's leases, 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, then this lease will become null and void without penalty, any deposits shall forthwith be returned by Landlord to Tenant.

This Lease may he 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.

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

IN WITNESS WHEREOF the parties have set their hands and seals as of the day and year first written above.

Agreed and Accepted

Landlord:
	Shamira, LLC

Date:	6-12-14

Tenant:
	Diego Pellicer Worldwide, Inc. it’s CFO/SECRETARY

Date:	6/12/14

Exhibit 10.8

EXHIBIT A

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into by and between: 2949 W. Alameda, Ave, LLC whose address is 675 Kalamath Street Denver Colorado 80204, as Landlord, and Diego Pellicer Worldwide, Inc. a Delaware Corporation, as Tenant, which is liable for all provisions, covenants and obligations hereunder.

THIS LEASE IS CONTINGENT UPON 2949 W ALAMEDA AVE LLC, PURCHASING & CLOSING ON THE PROPERTY LOCATED AT 2949 W ALAMEDA AVE, DENVER CO.

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby ^e° acknowledged, and under the warranties, representations, conditions and covenants herein, the Parties agree to the following:

WITNESSETH:

Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, upon the
terms and conditions as hereinafter set forth, premises described as follows:

ALAMEDA HEIGHTS B16 PT OF L21 TO 24 BEG NW COR L21 E 12FT TOTPOB S 65.02FT SELY
23.33FT E 106.43FT N 81.5FT W 135FT TO TPOB

Also known as

2949 W Alameda Ave, Denver, CO 80219

Together with all rights privileges, easements, appurtenances and amenities belonging to or in any way pertaining to the premises and together with the buildings and other improvements situated upon said premises. All personal property and business property located on and in the premises on commencement date shall be considered property of the Landlords and included in the lease. Tenant shall take inventory of all items within 30 days from the commencement date and share it with landlord. Tenant shall be responsible to insure, maintain and pay the personal property taxes on said property. (said real property, buildings and improvements hereinafter referred to as the "premises").

Base Term. To have and to hold the same for a term of (5) years commencing on the First day of August, 2014 until July 31, 2019 with one Five (5) year extension which must be exercised no less than 120 days prior to the end of the first lease period. Should the Tenant exercise the 5 year option the lease rate shall be $25,000.00 for the term.

Base Rent. Tenant hereby agrees to pay to Landlord, Rent as Follows:

Base Rent: $20,000.00 per month for 3,303 sqft plus NNN. The NNN Shall be $700.00 per month approximately. The base rent shall not increase throughout the term of this lease.

The Payment, Plus "NNN" expenses shall be payable in equal monthly installments as listed in the schedule above, in advance without notice on the first day of each month during said term, at such other place as Landlord may designate in writing from time to time, without any set-off or deduction whatsoever ("Base Rent").

Tenant shall tender to Landlord a payment of	First Month's Payment:	$	20,000.00
	Last 2 Month's:	$	40,000.00
	Security Deposit:	$	40.000.00
Total of Initial payment		$	100,000.00

The initial payment consists of first month's payment, two months' rent for security deposit and the two last months. Landlord shall not be obligated to pay interest on the security deposit. Tenant shall take immediate possession and lease commencement date is August 1, 2014. Landlord shall have the right to commingle such security deposit with other funds of Landlord. The portion of the deposit not held back

Additional Rent. All rent not defined, as base rent shall be considered "Additional Rent". In addition to the Base Rent specified above, Tenant shall pay to the Landlord an amount which Landlord shall Estimate for the cost of all personal property and real property (real estate) taxes, assessments and waste water attributable to the building and the operation thereof, all insurance as specified in this Lease and all maintenance of the building in order to keep it in good operational condition, this rent is also called NNN. The sum of the expenses shall be estimated by Landlord each year and divided by 12 and Tenant shall pay such rent along with his base rent. Landlord shall also be entitled to such other sums due in excess of the base rent which shall also be titled Additional Rent as specified in the Lease. As of the signing of this lease annual real estate taxes are to be determined at the beginning of each calendar year.

NNN Items. Included in the NNN items are all expenses related to the operation of the building, including all taxes levied against the building, insurance. Legal and professional fees and charges by any city authority, sidewalk improvements, and any other expense not considered a capital expense incurred by Landlord in operating the property. In addition, in the event the actual NNN Expenses exceed the budgeted NNN Expense payments, Tenant shall pay the difference within thirty (30) days of written notice by Landlord. Landlord will give the appropriate credit if the budgeted NNN Expense exceeds the actual.

Exclusions from. NNN items. None

Tenant shall keep in good order, condition and repair the Premises and every part thereof, (regardless of whether the damaged portion of the Premises or the means of repairing the same are accessible to Lessee) including, without limiting the generality of the foregoing, all plumbing, heating, air conditioning, ventilating, electrical and lighting facilities and equipment within or about the Premises, fixtures, interior walls and interior surfaces of exterior walls, ceilings, windows, doors, plate glass, showcases, skylights, entrances and vestibules located within or about the Premises and all sidewalks, including prompt snow removal as required by the City and County of Denver, and signs located on the building . In the event of any fine or charge assessed by the City and County of Denver or it's subdivisions for failure to maintain the building or sidewalks, Tenant shall promptly pay the same. If Lessee fails to perform Lessee's obligations under this section Lessor or his agents or contractors may at Lessor's option enter upon the Premises, after ten (10) days' prior written notice to Lessee, and put the same in good order, condition and epair, and the cost thereof together with interest thereon at the rate of 18% per annum shall be due and payable as additional rent to Lessor together with Lessee's next rental installment. Landlord shall be entitled to a fee of 20% of the cost of any repairs or maintenance performed by Landlord.

Insurance Portion of NNN Items.

All-Risk Insurance. In the name of the Landlord, Tenant shall keep all improvements located on or appurtenant to the Premises insured against loss or damage by fire and such other perils as are now or hereafter included in the standard "All-Risk" policy in common use for commercial structures, including vandalism and malicious mischief The amount of the Ail-Risk insurance shall be equal to one hundred percent (100%) of the then actual replacement cost of existing improvements, including the value of any leasehold improvements or betterments, but without deductions for depreciation. Landlord may, on each anniversary date of this Lease, request the carrier of the insurance (or the agent for the carrier) to determine the amount of insurance required by the provisions of this paragraph, and the resulting determination shall be conclusive between the parties. Upon Landlord's request, Tenant shall include the holder of any mortgage encumbering the Premises by virtue of a standard mortgagee's clause to the extent of that mortgagee's interest. In addition to the insurance set forth above, Tenant shall provide Rental Income Insurance (loss of rents insurance) in the name of Landlord in an amount sufficient to cover the full Base Rent as well as all other payments which are the responsibility of Tenant under the terms and conditions of this Lease. Further, if there is a boiler or similar equipment on the Premises, Tenant shall provide a separate policy covering boiler explosion, together with rental income insurance resulting from a boiler explosion. In lieu of Tenant acquiring the insurance as above set forth, Landlord shall have the exclusive right to purchase the insurance required by the provisions of this subsection 6(a) in Landlord's name and to forward Tenant a bill for the premium for such insurance. Tenant shall pay said bill as part of Landlord's NNN expenses through Tenant.

Personal Property. Tenant shall be responsible for insuring any and all personal property that may be owned by Landlord and Tenant. Any insurance that may be purchased pursuant to this section 6 or any proceeds that may be payable as a result of a loss under any such insurance shall in no way reduce, alter, diminish or modify any provisions of this Lease and specifically the indemnity provisions of section 11 hereof. Further Tenant shall complete an inventory of all property located

Hold Over. Any rule or law to the contrary notwithstanding, in the event Tenant remains in possession of the Premises or any part thereof subsequent to the expiration of the term of this Lease or any extension thereof and such holding over shall be with the consent of Landlord, it shall be conclusively deemed that such possession and occupancy shall be a tenancy from month-to-month only, at a rental which was existing at the end of the term of this Lease or any extension thereof, unless increased by Landlord upon not less than 30 days' prior written notice, and, further, such possession shall be subject to all of the other terms and conditions (except any option to renew or option to purchase) contained in this Lease. In the event Tenant otherwise Holds Over, Tenant shall pay to Landlord the surn of 150% of the rent.

Inspection and Acceptance of Premises. Tenant acknowledges that it has inspected or has had opportunity to inspect and accepts the premises in its condition as suitable for the purpose for which the premises are leased to the Tenant. Taking of possession by Tenant shall be deemed conclusively to establish that said premises are in good and satisfactory condition as of when possession was taken. Tenant further acknowledges that no representations as to the repair of the premises, nor promises to alter, remodel or improve the premises have been made by Landlord, unless such are expressly set forth in the lease. If this lease is executed before the premises become vacant or otherwise available and ready for occupancy, or if any present tenant or occupant of the premises holds over, and Landlord cannot acquire possession of the premises prior to the date above recited as the commencement date of this lease, Landlord shall not be deemed to be in default hereunder, and Tenant agrees to accept possession of the premises at such time as Landlord is able to tender the same, which date shall thenceforth be deemed the "commencement date"; and Landlord hereby waives payment of rents covering any period prior to the tendering of possession to Tenant hereunder. After the commencement date Tenant shall, upon demand, execute and deliver a letter of acceptance of delivery of the premises. Tenant specifically accepts the premises as follows: Leased premises shall be as is where is. Tenant shall be responsible for their own electric bill and shall be due monthly.

Use of Premises. Tenant shall have the right to use and occupy the Premises for the following purposes and no other which is a medical and/or retail marijuana operation, legal under the constitution of the State of Colorado or permitted by Colorado law. Tenant asserts he will not sell any product in the property which is illegal for sale. Tenant shall not use any portion of the premises outside of the building structures to sell products, including the yard, patios, driveways and sidewalks.

Assignment and Subleasing. Neither this Lease nor any interest herein may be assigned by Tenant, voluntarily or involuntarily, by operation of law or otherwise. Any consent to assignment given by Landlord shall not constitute a waiver of necessity for such consent to a subsequent assignment_ Any assignment in violation of this paragraph shall be null and void. Landlord shall be entitled to a reasonable fee for his time and effort in reviewing the new tenant's credit and use of the property upon application for assignment.

The Landlord hereby authorizes and consents for the Premises to be sublet by Tenant to licensed medical and/or recreational marijuana growers, processors and/or retailers, including DPCO, Inc (the "Subtenant"), and those affiliates of subtenant controlled by or under direct common control of subtenant. Tenant shall have the right to replace the Subtenant with Landlord's approval, which approval shall not be unreasonably withheld; however Tenant shall remain responsible for all terms and conditions of this Lease. Notice shall include name and contact information of the new Subtenant and proof of licensing approval from the MMED and City of Denver. New Subtenants must meet all other requirements of this Lease. In addition to Tenant, any sub lessee or assignee shall be personally liable for all payments, conditions, covenants and agreements in this Lease. Landlord shall not unreasonably withhold approval of a sublease, and may take into consideration the Sub-lessor's prospective use of the property, his business experience, his capital resources and his credit rating.

Occupational Safety and Health Act. Tenant shall fully comply with the Occupational Safety and Health Act of 1970 (as amended) (Chapter XVII, Title XIX of the United States Code) (OSHA) or applicable state statute adopted pursuant to OSHA. It shall be Tenant's obligation to fully comply with the provisions and standards as contained in said Act (or as the same may be amended) and Tenant shall hold Landlord harmless from any obligations or responsibilities, if any, created under said OSHA or other applicable federal or state statute. Further, Tenant shall be responsible to make any and all repairs and alterations to the structural and non-structural components of the Premises, or to any appurtenances situated upon the Premises that may be required of Landlord as provided in any OSHA or any other statute, law or ordinance in effect at the time of the execution of this Lease or which may hereafter be enacted.

Care of the Premises. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Premises_ At the termination of this Lease, by lapse of time or otherwise, Tenant shall deliver up the Premises to Landlord in as good condition as at date of possession by Tenant, ordinary wear and tear excepted; and Tenant shall remove all of Tenant's trade fixtures, furniture and other effects. All movable furniture and other effects not so removed shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or any other person and without obligation to account therefore, and Tenant shall pay Landlord all expenses incurred in connection with such property. Tenant's obligation to observe or perform this covenant shall survive the termination of this Lease.

Tenant shall pay before delinquency all taxes, assessments, license taxes and other charges levied, assessed or imposed upon Tenant's operation, occupancy or conduct of business at the Premises or upon Tenant's equipment, furniture, trade fixtures, leasehold improvements and other personal property of any kind installed or located on the Premises, which become payable during the term of this Lease.

Alterations to Premises. Tenant shall have the right, at is sole cost and expense, to make changes or alterations to the Premises upon written approval of Landlord. Tenant may, without written approval, change the flooring in the Premises at Tenant's expense, may paint the interior and remove or change the dividers currently on the floor. In the event Tenant removes the existing tile on the floor, he shall place new floor coverings such that, in the event of removal of any dividers, the floor remains intact and as one floor, without holes or vacant spots where the dividers are placed.

Tenant shall make no alterations in or additions or repairs to the Premises without first obtaining the written consent of Landlord, which consent shall not be unreasonably withheld; and Tenant shall notify Landlord at least ten (10) business days in advance of any alterations in or repairs or additions to the Premises which Tenant proposes to make. Tenant shall post notice pursuant to the Colorado Mechanics Lien Act so that any lien recorded against the property of which the Premises are a part does not attach to Landlord's interest.

Ail such alterations, additions or improvements shall be made at Tenant's sole cost and expense and, except for furniture and trade fixtures, shall become the property of Landlord and shall be surrendered with the Premises, as a part thereof, at the end of the term hereof_ Landlord may require Tenant to remove all such improvements installed by the Tenant and to repair any damage to the Premises from such removal. Tenant shall construct such improvements, alterations or repairs in conformance with any and all applicable rules and regulations of any Federal, State, or Municipal or special authority code or ordinance. At least ten (10) days before the commencement of any such work, Tenant agrees to provide Landlord with lien waivers from all persons performing such work and material men providing materials used in connection therewith. In the event Tenant orders any construction, alterations, decorating or repair work directly from Landlord, the charges for such work shall be payable to Landlord upon satisfactory completion of such work. If not paid when invoiced, such nonpayment shall be deemed an event of default hereunder. In the event any lien shall be filed for labor performed or materials supplied, Tenant shall cause such lien to be released within thirty (30) days. Failure to do so will be considered a material breach of this Lease Agreement.

Condemnation. Complete Taking. If, during the term of this Lease, or any extension hereof, the whole or substantially all of the Premises shall be taken as a result of the exercise of the power of eminent domain or transferred under threat of condemnation, this Lease shall terminate as of the date of vesting of title of the Premises or delivery of possession, whichever event shall first occur, pursuant to such proceeding or transfer. For the purpose of this section 15, "substantially all of the Premises" shall be deemed to have been taken if a taking under any such proceeding shall involve such an area, whether the area be improved with building or be utilized for a parking area or for other use, that Tenant cannot reasonably operate in the remainder of the Premises the business being conducted on the Premises at the time of such proceeding.

Partial Taking_ If, during the term of this Lease, or any extension hereof, less than substantially all of the Premises shall be taken in any such proceeding, this Lease shall not terminate. The rent thereafter due and payable by Tenant shall be reduced in such proportion as the nature, value and extent of the part so taken bears to the whole of the Premises. Landlord shall, from the proceeds of the condemnation, restore the Premises for use of Tenant

Award. Any award granted for either partial or complete taking regarding the Premises shall be the sole property of Landlord.

During such Restoration, Tenant shall be entitled to a proportionate reduction of rent while such Restoration work is being completed, such proportionate reduction to be based upon the extent to which such Restoration interferes with Tenant's use of the Premises. If: (a) the Premises are encumbered by a mortgage or deed of trust ("Mortgage") and the holder of the Mortgage requires that all or a portion of the proceeds of the insurance be paid to said holder, or (b) the insurance procOeeds available for the Restoration are less than 90 percent of the cost of the Restoration, or (c) the Restoration cannot be completed within 120 days, then Landlord may, at its option, declare this Lease terminated and all parties shall be relieved from further obligation hereunder from the Date of the Damage. If the Restoration cannot be completed within 120 days from the date of the Damage, then Tenant shall likewise have the right, at its option, to declare this Lease terminated and all parties shall be relieved from further obligation hereunder from the date of the Damage. In the event that either Landlord or Tenant is entitled to declare this Lease terminated as set forth above, then such notice shall be given within thirty (30) calendar days from the date of determination that the Restoration cannot be completed within 120 days by the party declaring such to the other party.

Anything in this section 17 to the contrary notwithstanding, if the improvements contained on the Premises are substantially damaged or destroyed from any cause whatsoever during the last eighteen (18) month period of this Lease, Landlord may, at its option, declare this Lease terminated and all parties shall be relieved from further obligation hereunder from that date of said damage. However, if an option to extend the term of this Lease is granted herein, then if Tenant exercises said option within twenty (20) calendar days from the date of Damage and if the remaining term plus the option period is for a period of time longer than eighteen (18) months, Restoration and the parties' obligations and rights shall be as set forth in the preceding paragraph, All insurance proceeds paid as a result of a casualty shall be the sole and exclusive property of the Landlord.

Default. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant:

Tenant failing to pay Base Rent or Additional Rent within Ten days of its due date;

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

Tenant 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 Landlord or if such default is a default which cannot be cured within a 30 calendar day period, then Tenant'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 Landlord or to the Tenant, the time for cure shall conform to the time granted by such governing authority, including any time granted by any tribunal.

Tenant abandoning the Premises.

Tenant 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 Tenant unless said involuntary bankruptcy is terminated within thirty (30) calendar days from the date of said filing, or Tenant filing in any court for the appointment of a receiver or trustee of all or a portion of Tenant's property or there being appointed a receiver or trustee for all or a portion of Tenant's property, unless said receiver or trustee is terminated within thirty (30) calendar days from the date of said appointment; Tenant making any general assignment or general arrangement of its property for the benefit of its creditors.

In the event of an occurrence of default as set forth above, Landlord shall have the right to: Terminate this Lease and end the term hereof by giving to Tenant written notice of such termination, in which event Landlord shall be entitled to recover from Tenant at the time of such termination the present value of the excess, if any, of the amount of rent reserved in this Lease for the then balance, not to exceed 6 months, hereof over the then reasonable rental value of the Premises for the same period. The present value shall be determined by discounting all future excess rent amounts at the rate of eight percent (8%) per annum, It is understood and agreed that the "reasonable rental value" shall be the amount of rental which Landlord can obtain as rent for the remainder of the initial term or renewal term, whichever is applicable; or without resuming possession of the Premises or terminating this Lease, to sue monthly for and recover all rents, other required payments due under this Lease, not to exceed 6 months, and other sums including damages and legal fees at any time from time to time accruing hereunder; or without terminating this Lease, re-enter and take possession of the Premises or any part thereof and repossess the same as of Landlord's former estate or expel Tenant and those claiming through or under Tenant and remove the effects of both or either (forcibly, if necessary) without being deemed guilty in any manner of trespass and without prejudice to any remedies for rent delinquencies or preceding lease defaults, in which event Landlord may from time to time without terminating this Lease re-let the Premises or any part thereof for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord may, in its sole discretion, deem advisable, with the right to make alterations and repairs to the Premises, and neither the serving of a demand for possession nor the re-entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of termination be given to Tenant. In the event of Landlord's election to proceed under this subsection (c), then such repossession shall not relieve Tenant of its obligation and liability under this Lease, all of which shall survive such repossession, and Tenant shall pay to Landlord as current damages the basic rental and other sums hereinabove provided which would be payable hereunder if such repossession had not occurred, less the net proceeds (if any) of any re letting of the Premises after deducting all of Landlord's expenses in connection therewith, including but without limitation all repossession costs, brokerage commissions, legal expenses, attorneys' fees, expenses of employees, alteration costs and expenses of preparation of such re letting. Tenant shall pay such current damages to Landlord on the days on which the basic rent would have been payable hereunder and as if possession had not been retaken, and Landlord shall be entitled to receive the same from Tenant on each such day. Any Late Payment shall bear a penalty of $200.00.

Subordination and Estoppel. This Lease is subject and subordinate to all mortgages and deeds of trust which now or hereafter may affect the Premises, and Tenant shall execute and deliver upon demand of Landlord any and all instruments desired by Landlord subordinating this Lease in the manner requested by Landlord to any new or existing mortgage or deed of trust. Should Tenant fail to execute and deliver any such documents or instruments within ten (10) calendar days after receipt of such demand, Tenant irrevocably constitutes and appoints Landlord as Tenant's special attorney-in-fact for the purpose solely of executing and delivering any such documents or instruments pursuant to this paragraph. Any holder of a mortgage or deed of trust may rely upon the terms and conditions of this paragraph. Further, Tenant shall at any time and from time to time, upon not less than five (5) calendar days' prior written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which rental and other charges are paid in advance, if any, and acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord, or specifying such defaults, if any are claimed. Tenant shall attorney to any purchaser at any foreclosure sale or to any grantee or transferee designated in any deed given in lieu of foreclosure. Any subordination agreement to be executed by Tenant shall provide that as long as Tenant is current and not in default under the terms and conditions of this Lease, the holder of the mortgage shall not disturb the tenancy of Tenant.

Hazardous Use. Tenant shall not occupy or use, or permit any portion of the Premises to be occupied or used for any business or purpose which is unlawful, disreputable or deemed to be extra hazardous, or permit anything to be done which would in any way increase the rate of casualty or liability insurance coverage on the Premises or the Building and/or its contents. Tenant will not store, create or use any Hazardous Materials (as they are defined in section 21, below) on or about the Premises without the prior written consent of Landlord, which approval may be withheld at Landlord's discretion. With respect to any such storage, creation or use of Hazardous Materials, Tenant agrees to use, store, and dispose of same as required by applicable local, state and federal laws; to provide immediate notice of any releases; to provide in advance the identity of specific Hazardous Materials which will be stored, created or used on the Premises; and to maintain the Premises free of contamination and return the property to its pre-lease condition.

Indemnification. Tenant and all other signatories and guarantors hereof jointly and severally agree to indemnify, protect and save Landlord harmless against and from any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, attorneys' and experts' fees and disbursements) which may at any time be imposed upon, incurred by or asserted or awarded against Landlord, and arising from or out of any Hazardous Materials, as hereinafter defined, hereafter located upon or within all or any portion of the Premises as a result of Tenant's actions, including without limitation (i) the cost of removal of all such Hazardous Materials from all or any portion of the Premises, (ii) additional costs required to take necessary precautions to protect against the release of Hazardous Materials on, in, under or affecting the Premises, into the air, any body of water, any other public domain or any surrounding areas, and (iii) costs incurred to comply, in connection with all or any part of the Premises, with all applicable laws, orders, judgments and regulations with respect to Hazardous Materials.

This Indemnification shall be a continuing indemnity for 6 months and shall remain in full force and effect until released and cancelled by Landlord or its successors and assigns.

Notices. All notices, demands and requests required to be given by either party to the other shall be in writing and shall be hand delivered or sent by certified or registered mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below or at such other addresses as the parties may designate in writing delivered pursuant to the provisions hereof. Any notice when given as provided herein shall be deemed to have been delivered on the date personally served or two (2) banking days subsequent to the date that said notice was deposited with the United States Postal Service.

Time is of the Essence. Time is of the essence hereof

Quiet Enjoyment. Landlord represents and warrants that Landlord has the right to enter into and make this Lease; and Tenant, upon paying the rent herein reserved and upon performing all of the terms and conditions of this Lease on its part to be performed, shalt at all times during the term herein demised peacefully and quietly have, hold and enjoy the Premises.

Right to Inspect or Show Premises. Landlord, or Landlord's agent and representative, shall have the right to enter into and upon the Premises or any part thereof at all reasonable hours for the purpose of examining the same. Landlord, or Landlord's agent and representative, shall also have the right to show the Premises to persons wishing to purchase or lease the same at all reasonable hours. During the 90 calendar day period prior to the expiration of this Lease, or any extension thereof, Landlord, or Landlord's agent and representative, shall have the right to place "to let" or "for sale" notices on the Premises, and the Tenant agrees to permit the same to remain thereon. Landlord will observe and follow all marijuana laws and regulations as defined by state and local regulations.

Confidentiality and Nondisclosure. Both Parties agree not to disclose the confidential information obtained from the discloser and this Lease to anyone unless required to do so by law. In consideration of each Party's disclosure of Confidential Information to the other Party, each Party agrees with respect to the Confidential Information received from the other Party, that it: (a) will maintain such Confidential Information in the strictest confidence; (b) will not disclose, transfer or otherwise make available any of such Confidential Information to any third party without the prior written consent of the other Party; and (c) will not use the Confidential Information for any purpose other than related to this letter. Each Party shall take reasonable measures to protect the Confidential Information of the other Party. Those measures shall not be less than the measures taken to protect the receiving Party's own confidential information. Confidential Information of the other Party may be provided to a Party's Representatives only on a need-to-know basis, and prior to such provision, the Party will notify each Representative to whom such disclosure is made that such Confidential Information is received in confidence and shall be kept in confidence by such Representative, Neither Party may disclose Confidential Information to current or previous employees without the prior consent of the other party. Landlord hereby consents to Tenant publicly communicating that this Lease has been executed and the general terms of the Lease and operation, but will withhold private information including premises address and landlord information.

If at any time daring the term of the Lease Landlord receives an offer from a third party to purchase the Premises which Landlord wishes to accept, Landlord shall deliver to Tenant a copy of the complete proposed contract received and allow Tenant to purchase the Premises under the same terms and conditions.

If Federal, Colorado or Denver laws or regulations prohibit a Subtenant's operation of a marijuana operation at this location during the term of this Lease or if a governmental notice is delivered to Landlord or Tenant which requires the cessation of marijuana cultivation or infusion on the Premises, Landlord or Tenant may terminate this Lease with no penalties and Tenant shall vacate the Premises within 30 days, any deposits shall forthwith be returned by Landlord to Tenant.

If Premises' location or sub-tenant's leases, 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, tenant may terminate this lease and this lease will become null and void without penalty, any deposits shall forthwith be returned by Landlord to Tenant.

This Lease 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.

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

Landlord's Representation. Landlord represents to Tenant that, (i) neither Landlord nor any of its officers, directors or partners nor any person or entity that to its current actual knowledge, directly owns beneficial interest in it, as described in the Schedule 14A Information Required in the Proxy Statement of Crescent Real Estate Equities Company dated as of May 28, 2004, is a Prohibited Person with whom U.S. persons or entities are restricted from doing business under regulations of OFAC or under the Executive Order, or other governmental action, and (ii) that throughout the term of this Lease, Landlord shall comply with the Executive Order and with the Money Laundering Act, if, when and to the extent Landlord may become subject to the Money Laundering Act.

(a)

Prohibited Persons and Transactions. Landlord represents and warrants to Tenant that Landlord is currently in compliance with and shall at all times during the Term (including any extension thereof) remain in compliance with the regulations of the OFAC of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Person Who Commit, Threaten to Commit or Support Terrorism), or other governmental action relating thereto.

(b)

Landlord warrants and represents Landlord (i) is not under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti- Money Laundering Laws; (ii) has not been assessed civil or criminal penalties under any Anti-Money Laundering Laws; (ii) has not been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (iii) has not had any of its funds seized or forfeited in any action under any Anti-Money Laundering Laws.

(c)

"Anti-Money Laundering Laws" means those laws, rules, regulations, orders and sanctions, state and federal, criminal and civil, that (a) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (b) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotic dealers or otherwise engaged in activities contrary to the interests of the United States; c) require identification and documentation of the parties with whom a financial institution conducts business; or (d) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed to include the Executive Order Number 13224 on Terrorism Financing (September 23, 2001), the Patriot Act, the Bank Secrecy Act, Pub.L. No. 91-508, 84 Stet. 1305 (1970), the Trading with the Enemy Act, 50 U.S.C. Appx. Section 1 et seq., the International Emergency Economics Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction regulations promulgated pursuant thereto by OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957, as amended.

(d)

"Patriot Act" means the USA PATRIOT Act of 2001, Pub_ L. No. 107-56, together with all laws, rules, regulations and orders issued in connection therewith.

[Signature Page Follows]

IN WITNESS WHEREOF the parties have set their hands and seals as of the day and year first written above,

Agreed and Accepted

LANDLORD:

Signature:	/s/ Marcela U. Cristancho

Print Name:	Marcela U. Cristancho
	2949 W Alameda, LLC.

Company:	2949 W Alameda Ave. Denver Co 80219.

Date:	7/14/14

TENANT

Signature:	/s/ Steven S. Hubbard

Print Name:	Steven S. Hubbard

Company:	DIEGO PELLICER WORLDWIDE INC.

Date:	7/15/2014

Exhibit 10.9

COMMERCIAL SUBLEASE AGREEMENT

THIS COMMERCIAL SUBLEASE AGREEMENT (the "Commercial Sublease Agreement" or "Sublease"), made on this 13^thday of August, 2014 by and between M&S, LLC having an address at 4910 West Colfax Avenue, Denver, Colorado, 80204 ("Sublessor") and Diego Pellicer Worldwide, Inc., having an address at 3496 Fairview Way, West Linn, Oregon, 97068 ("Sublessee").

WHEREAS, on the 13^th day of August, 2014, Sublessor has entered into a commercial lease agreement with the Lessor for a period starting from August 13^th , 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 13th day of August, 2014 and shall continue until the 30^th of June, 2018.

Sublease

This Commercial Sublease Agreement will be subject to the remaining terms and conditions contained in the Lease. In such an event, the terms of this Commercial sublease Agreement shall control over the 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 $25,000 per month. The monthly payment shall be due in advance on the first day of each calendar month at the following address 4910 West Colfax Avenue, Denver, Colorado, 80204, or at such other place designated by written notice from Sublessor.

*Additional 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 two month security deposit in the amount of $125,000.00 (One Hundred and Twenty Five 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.

The Master Lease's rent shall be paid directly to Landlord and the difference between the Sublease and the Master Lease will be paid directly to Sublessor.

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

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.

Termination

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 Sublessees use of the Premises, including without limitation the manufacture, selection, delivery, possession, use, operation, or return of the Premises.

Assignment and Subletting

Sublessee shall have the right to sublet the premises or assign this Agreement with the prior written consent of the Sublessor, as long as Sublessee remains financially responsible to Sublessor.

The Sublessor hereby authorizes and consents for the Premises to be sublet by Sublessee to licensed medical and/or recreational marijuana growers, processors and/or retailers, including DPCO, Inc, DPCO Denver, LLC, DPCO Jason, LLC, DPCO Brighton, LLC and/or DPCO Colfax, LLC (the "Second Sublessee"). Sublessee shall have the right to replace the Second Sublessee with Sublessor's approval, which approval shall not be unreasonably withheld; however Sublessee shall remain responsible for all terms and conditions of this Sublease. Sublessee must also receive approval from Lessor. New Second Sublessees must meet all other requirements of this Sublease. Any Second Sublessee or assignee shall be liable for all payments, conditions, covenants and agreements in the Master Lease.

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. 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:
M&S, LLC	Diego Pellicer Worldwide, Inc.
4910 West Colfax Avenue	3496 Fairview Way
Denver, Colorado 80214	West Linn, Oregon, 97068

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.

Landlord & Sublessor's Representation: Landlord and Sublessor represents to Sublessee that all funds associated with the negotiation and subsequent rental of the Master Lease were and are in no way associated with money laundering and is currently in compliance with, and shall at all times during the Term (including any extension thereof) remain in compliance with the Executive Order and with the Money Laundering Act, if, when and to the extent Landlord may become subject to the Money Laundering Act.

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.

[Signature Page Follows]

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

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

SUBLESSOR		SUBLESSEE
M&S, LLC		Diego Pellicer Worldwide, Inc.

/s/ Shaw Aryan		/s/ Ronald Throgmartin
Shaw Aryan		Ronald Throgmartin

LANDLORD
William P Vassil

/s/ William P Vassil

Landlord: James J. Domenico

/s/ James J. Domenico

Exhibit 10.10

Office 206-427-4100

Cell 503-635-7097

Email sshubbard@earthlink.net

REAL ESTATE LEASE AGREEMENT

GROSS - WITH OPTION

THIS LEASE AGREEMENT is made and entered into this 15 day of September 2014, by and between Oakway Golf Course, Inc., hereinafter called the Lessor, and Diego Pellicer Worldwide, Inc. hereinafter called the Lessee. In consideration of the covenants, agreements, and stipulations herein contained on the part of the Lessee to be paid, kept and faithfully performed, the Lessor does hereby lease, demise and let unto the said Lessee those certain premises, as is, situated in the City of Springfield, County of Lane and State of Oregon, at: 800 North 42" Street and further described as: 16,060 square feet upon the following TERMS and CONDITIONS: See Exhibit "B”.

SECTION 1. OCCUPANCY

1.1	Original Term. The term of this lease shall commence on September 1, 2014, and continue through August 31, 2019.

1.2	Possession. Lessee's rights to possession and obligations under this lease shall commence on September 1, 2014.

1.3	Renewal Option. If the Lessee is not in default in regard to the terms and provisions of this Real Estate Lease Agreement at the time the option is exercised or at the time the renewal term is to commence, Lessee shall have the option to renew this Real Estate Lease Agreement subject to all the terms and provisions as follows:

	(a) For TWO (2) Successive term(s) of FIVE (5) year(s) each with each renewal term commencing on the day following the expiration of the preceding term.

	(b) The first renewal term shall commence on the 1st day of September 2019. The option regarding a renewal term shall be exercised by written notice sent by Lessee to Lessor not less than one hundred twenty (120) days prior to September 1, 2019 in regard to the first renewal term. The giving of such notice shall be sufficient to make the Lease binding for the renewal term provided that each of the parties shall promptly execute prior to the last day of the preceding term a further written amendment to the Lease in which the parties agree to extend the lease term, provided that under all circumstances the rent for any renewal term shall continue to increase at the rate of 2% per year commencing on the lst of September of each year of each renewal term; and therefore, the base monthly rent for the first year of the first renewal term shall be $7 955.00 per month.

	(d) In the event Lessee exercises either or both of its conditional options to renew the Real Estate Lease Agreement for one or two additional renewal terms, then as a condition thereto, the Personal Guaranties of Lessee(s), if any shall be attached hereto as continuing Guaranties and said Guaranties shall not terminate until such time as Lessee has fully performed all of its duties and obligations, and made all payments to Lessor pursuant to the terms and conditions of this Real Estate Lease Agreement without exception.

1.4	Lessor, or Lessor's agent, shall have the right to place "For Lease", "For Sale" or similar such signs on the subject leased property at any time within the last one hundred and twenty (120) days of the lease term. The location of such signs shall be at the sole discretion of the Lessor (see also 18.7).

Page 1 of 13

SECTION 2. RENT (Also see Section 2.5 for Additional Rents)

2.1

Base Rent. Lessee shall pay to Lessor on the 1st day of each month in advance at such place as may be designated by the Lessor with base rent being per rent schedule below:

Year	Date	Base Monthly Rent
1	September 1, 2014 — December 31, 2014	$5,000.00
	January 1, 2015 — August 31, 2015	$7,227.00 based on $0.45 x 16,060 square feet
2	September 1, 2015 — August 31, 2016	$7,375.00
3	September 1, 2016 — August 31, 2017	$7,525.00
4	September 1, 2017 — August 31, 2018	$7,680.00
5	September 1, 2018 — August 31, 2019	$7,835.00
6	September 1, 2019 — August 31, 2020	$7,995.00
7	September 1, 2020 — August 31, 2021	$8,160.00
8	September 1, 2021 — August 31, 2022	$8,325.00
9	September 1, 2022 — August 31, 2023	$8,495.00
10	September 1, 2023 — August 31, 2024	$8,670.00

NOTE: Base Monthly Rent does not include amount due for Additional Rents. The amount of base rent payable by the Lessee is not in any way dependent upon or related to the number of square feet in the Premises being leased by the Lessee from the Lessor pursuant to the terms of this Agreement.

2.2

Method of Payment. Lessor may, at Lessor's discretion and after providing a written notice to Lessee, require Lessee to remit any and all payment(s) due under the terms of this Agreement with cash or a cashier's check.

2.3

Late Payment Charges. If Lessee fails to pay, within TEN (10) days after the due date thereof, any rent, Lessor advance, or other charge payable by Lessee under this Lease, then Lessee shall be obligated to pay to Lessor (in addition to the overdue principal amount of the rent, advance, or other charge) a late payment charge of $200.00 with said late payment charge being compounded monthly, for each month or fraction of a month during which the overdue principal amount remains unpaid. Payment date shall be that date on which Lessor receives said payment.

2.4

Security Deposit. Lessor retains a Security Deposit in the sum of $3,000.00 which is a refundable security deposit pursuant to the following terms and conditions: The deposit shall be a debt from Lessor to Lessee, refundable within THIRTY (30) days following expiration of the lease term or other termination not caused by Lessee's default. Lessor shall have the right to offset against the deposit any sums owing from Lessee to Lessor and not paid when due, any damages caused by Lessee's default, the cost of curing any default by Lessee should Lessor elect to do so, and the cost of performing any repair or cleanup that is Lessee's responsibility under this lease. Offset against the deposit shall not be an exclusive remedy in any of the above cases, but may be invoked by Lessor, as its option, in addition to any other remedy provided by law or this lease for Lessee's nonperformance. Lessor shall give notice to Lessee each time an offset is claimed against the deposit, and, unless the lease is terminated, Lessee shall within TEN (10) days following such notice deposit with Lessor a sum equal to the amount of the offset so that the total deposit amount, net of offset, shall remain constant throughout the lease term.

Note: $3,000.00 security deposit is being transferred from lease dated August 21, 2014 for approximately 10,890 square feet.

SECTION 3. REPAIRS AND MAINTENANCE

3.1

Lessor's Obligations. The following shall be the responsibility of Lessor:

(a) Lessor warrants that all electrical and plumbing systems are in reasonable operating order at date of Lessee's possession.

(b) Repairs and maintenance of the roof and gutters, exterior wails (including painting), bearing walls, structural members, and foundations.

(c) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Lessee and Lessor or Lessees of other portions of the same building.

(d) Repair and maintenance of exterior water, sewage, gas and electrical services up to the point of entry to the leased premises.

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3.2

Lessee's Obligation. The following shall be the responsibility of Lessee:

(a) Maintenance, repair or replacement of interior walls, ceilings, floor coverings, counters, cabinets, doors and windows and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the premises. Lessee covenants and agrees to replace any and all of the plate glass broken, vandalized, or scratched on the leased premises during the term of this lease. Repair of the heating and air conditioning system to include ordinary maintenance.

(b) Any Repairs necessitated by the negligence of Lessee, its invitees, customers, agents, employees, vendors, contractors, subcontractors, patrons, common carriers or suppliers, except as provided in Paragraph 7.1 dealing with waivers of subrogation.

(c) Lessee is responsible for ordinary maintenance and repairs of the heating and air conditioning systems and is responsible for any extraordinary repair or replacement expenses regarding the heating and air conditioning systems.

(d) Any repairs or alterations required under Lessee's obligation to comply with laws and regulations as set forth in Paragraph 4.2 (a) below.

(e) All other repairs to the premises which Lessor is not required to make under Paragraph 3.1 above.

(f) Compliance with all reasonable rules and regulations respecting the use of the Leased Premises issued by Lessor from time to time and communicated to Lessee in writing.

(g) Not commit waste, not suffer or permit waste to be committed, and not cause or permit any nuisance on or in the Leased Premises.

(h) All office desks with chairs must have chair mats under each chair to protect the carpet.

3.3

Lessor's Interference with Lessee. Any repairs, replacements, alterations, or other work performed on or around the leased premises by Lessor shall be done in such a way as to interfere as little as reasonably possible with the use of the premises by Lessee. Lessee shall have no right to an abatement of rent nor any claim against Lessor for any inconvenience or disturbance resulting from Lessor's activities performed in conformance with the requirements of this provision.

3.4

Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs which are required by this Section 3, the other party may make the repairs, and charge the actual costs of repairs to the first party. Such expenditures by Lessor shall be reimbursed by Lessee on demand, together with interest at the rate of TWELVE (12%) percent per annum from the date of expenditure by Lessor. Such expenditures by Lessee may be deducted from rent and other payments subsequently becoming due, or, at Lessee's election, collected directly from Lessor. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party, and charge the other party for the resulting expenses unless at least THIRTY (30) days before work is commenced, the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith.

3.5

Inspection of Premises. Lessor shall have the right to inspect the premises at any reasonable time or times, during normal business hours and without undue interference to Lessee's business operations, to determine the necessity of repairs. Whether or not such inspection is made, the duty of Lessor to make repairs shall not mature until a reasonable time after Lessor has received from Lessee notice in writing of the repairs that are required.

SECTION 4. USE OF THE PREMISES

4.1

Permitted Use. The premises shall be used for the processing of marijuana as regulated by the State of Oregon and for no other purpose without the written consent of Lessor which written consent of Lessor can be withheld for any reason or no reason at the discretion of Lessor. Lessor makes no representations as to the suitability of the premises for Lessees anticipated use(s), and Lessee acknowledges that Lessee has through its own due diligence determined suitability and, except as may be specially provided otherwise herein, hereby accepts the premises in the current "AS IS" condition.

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4.2

Restrictions on Use. In connection with use of the premises Lessee shall:

(a) Conform to all applicable laws and regulations of any public authority affecting the premises, and the use, including any requirements of any governmental agency relating to the use, storage, or spillage of any hazardous waste or materials. and correct at Lessee's own expense any failure of compliance created through Lessee's fault or by reason of Lessee's use, but Lessee shall not be required to make any structural changes to effect such compliance unless such changes are required because of Lessee's specific use. Lessee shall indemnify and hold Lessor harmless from any and all liability, including Lessor's reasonable attorney's fees, which Lessor may incur by reason of any default of Lessee in compliance with this paragraph.

(b) Refrain from any activity which would make it impossible to insure the premises against casualty, would increase the insurance rate, or would prevent Lessor from taking advantage of any ruling of the Oregon Insurance Rating Bureau or its successor allowing Lessor to obtain reduced premium rates for long-term fire insurance policies, unless Lessee pays the additional cost of the insurance.

(c) Refrain from any use which would be reasonably offensive to other Lessees or owners or users of neighboring premises or which would tend to create a nuisance or damage the reputation of the premises.

(d) Refrain from loading the floors beyond the point considered safe by a competent engineer or architect selected by Lessor.

4.3

Signs. Lessee is strictly forbidden from making any marks on or attaching any signs, antenna, aerial, or other device to the exterior or interior walls, windows, or roof of the premises without the prior written consent of Lessor. Should Lessor give consent for installation of any sign by Lessee, said consent would be subject to Lessor's approval of the proposed sign placement, method of installation, design, size, color, wording and evidence of approval by the prevailing local governmental authority. The entire cost related to any approved sign, design, construction and installation shall be the sole obligation of the Lessee. Immediately upon termination of Lessee's tenancy all signs previously installed by Lessee shall be removed by Lessee, at Lessee's expense, and the area where the sign was installed or attached, repaired to its original condition.

4.4

Parking. Lessee agrees to promptly comply with all parking instructions and restrictions as Lessor may, from time to time, impose for purposes of achieving the orderly and reasonable allocation of available on site parking amongst the Lessee and other occupants, customers, employees and agents of the subject property.

SECTION 5. HAZARDOUS MATERIALS.

Lessee shall not cause or permit any Hazardous Material (as defined in Section 5.3) to be brought upon, kept or used in or about the Leased Premises without the express prior written consent of Lessor (which Lessor shall not unreasonably withhold, provided that Lessee demonstrates to Lessor's reasonable satisfaction that such Hazardous Material is necessary or useful to Lessee's business, and that such Hazardous Material will be used, kept and stored in a manner that complies with all laws, rates, ordinances and regulations relating to the storage and use of the Hazardous Material). Lessor's consent shall not be deemed to be a waiver by Lessor of its rights to indemnification by Lessee as stated in Section 5.1. If Lessee breaches the obligations stated herein, or if the presence of Hazardous Material on the Leased Premises caused or permitted by Lessee at any time after execution of this Agreement, results in any contamination of the Leased Premises or any other private or public property, including, without limitation, sewers or streets, or if contamination of the Leased Premises by Hazardous Material otherwise occurs for which Lessee is legally liable to Lessor or to any third party for damages resulting there from, then:

5.1

Lessee shall indemnify, defend and hold Lessor harmless from and against any and all claims, judgments, damages, penalties, fines, costs, expenses, liabilities and losses (including, without limitation, diminution in value of the Leased Premises, damages for the loss or restriction on use of the Leased Premises, and sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees) that arise during or after the term of this Lease, as a result of or in connection with such contamination. The foregoing indemnification of Lessor by Lessee includes, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required or recommended by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil or groundwater on or under the Leased Premises or any public facilities.

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5.2

Lessee shall promptly take any and all actions, at its sole cost and expense, as are necessary or appropriate to return the Leased Premises or other private or public facilities to the condition existing prior to the introduction of any Hazardous Material to the Leased Premises; provided that Lessor's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld if such actions would not potentially have any material adverse effect on the Leased Premises or other private or public facilities. All contractors, laboratories and engineering firms (hereinafter "Consultants") chosen by Lessee to undertake any remedial action that may be necessary or appropriate on or about the Leased Premises or other private or public facilities shall be approved by Lessor prior to their employment by Lessee, which approval will not be unreasonably withhold. Consultants shall be licensed and bonded in accordance with all applicable laws. Duplicate copies of all reports and findings made by Consultants with regard to the condition of the Leased Premises or other private or public facilities shall be delivered to Lessor concurrently with their delivery to Lessee. Lessee shall have the work done by the Consultants at Lessee's sole risk, and the Lessee shall indemnify and hold Lessor and Lessor's agents and employees harmless from and against any and all loss, costs, liability, damage and expense relating to or arising from (1) any damage or injuries to Lessee, the Consultants, or the agents or assignees of either the Lessee or the Consultants, (2) for any third-party liability incurred by Lessee or the Consultants, and (3) for any damages or injuries suffered by Lessor, or Lessor's agents or employees by reason of any work done by the Lessee or the Consultants or their agents or employees.

5.3

As used herein, the term "Hazardous Material" means any hazardous or toxic substance, material or waste that is or becomes regulated by any local governmental authority, the State of Oregon, or the United States Government. The term "Hazardous Material" includes, without limitation, any material or substance which is designated as a hazardous substance pursuant to the Water Pollution Control Act (33 USC Section 1317); or defined as hazardous waste pursuant to the Resource Conservation and Recovery Act (42 USC Section 6901 et seq.); or defined as a hazardous substance pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 USC Section 9601 et seq.); or defined as a hazardous material pursuant to Article 90 of the Uniform Fire Code, as adopted by the City or County in which the subject property is located and, as amended from time to time.

SECTION 6. ALTERATIONS

6.1

Alterations Prohibited. Lessee shall make no improvements or alterations to the leased premises of any kind without first obtaining Lessor's written consent.

6.2

Alterations Required. The improvements delineated on the work sheet, if any, attached hereto and made part of this lease shall be performed by the party designated and within the time stated on the work sheet.

6.3

Ownership of Alterations. All improvements and alterations performed on the leased premises by either Lessor or Lessee shall be the property of Lessor when installed unless the applicable Lessor's consent specifically provides otherwise.

SECTION 7. INSURANCE

7.1

Insurance Required. Lessor shall be responsible for insuring the premises, and Lessee for insuring its personal property and trade fixtures located on the premises. Neither party shall be liable to the other for any loss or damage caused by water damage, sprinkler leakage, or any of the risks covered by a standard fire insurance policy with an extended coverage endorsement, and there shall be no subrogated claim by one party's insurance carrier against the other arising out of any such loss.

7.2

Liability Insurance. Before taking possession of the premises, Lessee shall procure and thereafter during the term of the lease shall continue to carry the following insurance at Lessee's costs: Public liability, including bodily injury, and property damage insurance in an acceptably rated company with limits of not less than $1,000,000.00 dollars for injury to one person, $ 2,000,000.00 dollars in aggregate. The aforementioned required insurance shall (1) cover all risks arising directly or indirectly, from or relating to, or out of Lessee's activities on or in regard to any condition of the leased premises, (2) shall protect Lessee against the claims of Lessor on account of the obligations assumed by Lessee under or pursuant to Paragraph 7.1 of the Lease Agreement, and (3) shall protect Lessor and Lessee against claims of all third persons. Certificates evidencing such insurance, and bearing endorsements requiring TEN (10) days' written notice to Lessor prior to any change or cancellation shall be furnished to Lessor prior to Lessee's occupancy of the property.

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SECTION 8. UTILITIES AND SERVICES

8.1

Utility and Service Chartres. Utilities and services shall be paid as follows:

Utility and Service	Lessor	Lessee	REMARKS

Telephone	☐	☒

Electric Service	☐	☒

Natural Gas Service	☐	☒

Municipal Water Service	☐	☒	Shared cost

Sewer Service	☐	☒	Shared cost

Refuse Collection	☐	☒

Interior Janitorial Service	☐	☒

Storm Water Charges	☐	☒	Shared cost

Landscape Care & Maintenance	☐	☒	Of Lessee area

Other	☐	☐

8.2

Telephone Service. Lessee hereby takes possession of said leased premises with telephone service in an "as-is" condition. Lessee acknowledges inspection of telephone service and accepts service as adequate.

SECTION 9. TAXES

9.1

Personal Property Taxes. Lessee shall pay all property taxes assessed against Lessee's inventory, equipment, appliances and other personal property located on the subject leased premises.

9.2

Real Property Taxes. Lessee shall pay twenty percent (20%) of real property taxes assessed against Lessor's real property. Lessee shall pay real property taxes at the rate of $295.00 per month in addition to the monthly base rent, and the aforementioned monthly tax payment shall be included each month with the payment of monthly base rent. Additional Rents shall be reconciled annually and adjusted accordingly_ Upon annual presentation of Lane County Real Property Tax Statement, Lessee shall remit to Lessor any accumulated underpayment of real property tax within 10 days of receipt of notice of amount due. Lessor shall also notify Lessee of any accumulated overpayment and said overpayment shall be credited against Lessee's monthly payment of rent and additional rents.

SECTION 10. DAMAGE AND DESTRUCTION

10.1

Partial Damage. If the leased premises are partly damaged, and Paragraph 10.2 below does not apply, the property shall be repaired by Lessor at Lessor's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes, and matters beyond the control of Lessor, and shall be performed in accordance with the provisions of Paragraph 3.3 above.

10.2

Destruction. If the leased premises are destroyed or damaged such that the cost of repair exceeds FIFTY (50%) percent of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than FORTY-FIVE (45) days following the date of damage. In such event all rights and obligations of the parties shall cease as of the date of termination, and Lessee shall be entitled to any prepaid amounts previously paid by Lessee, and attributable to the anticipated term. If neither party elects to terminate, Lessor shall proceed to restore the leased premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible, and thereafter shall proceed without interruption except for work stoppages on account of labor disputes, and matters beyond the control of the Lessor. In the event that Lessor and Lessee are unable to agree as to (1) whether the costs of repair exceed fifty percent (50%) of the value of the structure before any damage to the structure, or (2) the amount of the rent reduction, if any, if the premises are partially damaged pursuant to Section 10.1 of (3) whether the rent should be abated during a portion of, or all of the period of time during which the structure or the premises are being repaired, pursuant to Section 10.2, or (4) whether the damage occurred or was caused as a result of the fault of the Lessee's invitees, customers, agents, employees, vendors, contractors, subcontractors, patrons, common carriers or suppliers, then any such dispute shall be resolved by arbitration in the manner provided in Section 20.

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10.3

Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are un-leasable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Lessee, their agents, employees or invitees.

10.4

Damage Late in Term. If damage or destruction to which Paragraph 10.2 would apply occurs within ONE (1) year prior to the end of the then current lease term, Lessee may elect to terminate the lease by notice in writing to Lessor given within THIRTY (30) days after the date of the damage.

SECTION 11. EMINENT DOMAIN

11.1

Partial Taking. If a portion of the leased premises is condemned, and Paragraph 11.2 does not apply, the lease shall continue on the following terms:

(a) Lessor shall be entitled to all of the proceeds of condemnation, and Lessee shall have no claim against Lessor as a result of the condemnation.

(b) Lessor shall proceed as soon as reasonably possible to make such repairs and alterations to the premises as are necessary to restore the remaining premises to a condition as comparable as reasonably practicable to that existing at the time of the condemnation.

(c) After the date on which title vests in the condemning authority or an earlier date on which alterations or repairs are commenced by Lessor to restore the balance of the property in anticipating of taking, the rent shall be reduced in proportion to the reduction in value of the leased premises as an economic unit on account of the partial taking. If the Lessor and Lessee are unable to agree upon the amount of the reduction of rent regarding a partial taking, the amount of the reduction of the rent shall be determined by arbitration in the manner as is provided in Section 20.

(d) If a portion of Lessor's property not included in the leased premises is taken, and severance damages are awarded on account of the leased premises, or an award is made for detriment to the leased premises as a result of activity by a public body not involving a physical taking of any portion of the premises, this shall be regarded as a partial condemnation to which subparagraphs 11.1 (a) and (c) apply, and the rent shall be reduced to the extent of reduction in rental value of the premises as though a portion had been physically taken.

11.2

Total Taking. If a condemning authority takes all of the leased premises or a portion sufficient to render the remaining premises reasonably unsuitable for the use which Lessee was then making of the premises, the lease shall terminate as of the date the title vests in the condemning authorities. Such termination shall have the same effect as termination under Paragraph 11.1 (a) above. Lessor shall be entitled to all of the proceeds of condemnation, and Lessee shall have no claim against Lessor as a result of the condemnation.

11.3

Sale in Lieu of Condemnation. Sale of all or part of the leased premises to a purchaser with the power of eminent domain in the face of a threat or probability of the exercises of the power shall be treated for the purposes of this Section 11 as a taking by condemnation.

SECTION 12. LIABILITY AND INDEMNITY

12.1

Liens.

(a) Except with respect to activities for which Lessor is responsible, Lessee shall pay as due all claims for work done on and for services rendered or material furnished to the leased premises, and shall keep the premises free from any liens. If Lessee fails to pay any such claims or to discharge any lien, Lessor may do so, and collect the cost as additional rent. Any amount so added shall bear interest at the rate of TWELVE (12%) percent per annum from the date expended by Lessor, and shall be payable on demand. Such action by Lessor shall not constitute a waiver of any right or remedy which Lessor may have on account of Lessee's default.

(b) Lessee may withhold payment of any claim in connection with a good-faith dispute over the obligation to pay, so long as Lessor's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Lessee shall, within TEN (10) days deposit with Lessor cash or sufficient corporate surety bond or other surety satisfactory to Lessor in an amount sufficient to discharge the lien, plus any costs, attorney's fees, and other charges that could accrue as a result of a foreclosure or sale under the lien.

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12.2

Indemnification. Lessee shall indemnify and hold Lessor harmless and free from any and all costs, expenses and liabilities, including reasonable attorney's fees, arising by reason of any damage or injury to any person or property which may arise from or be due to (1) the occupancy or use of the premises by the Lessee or Lessee's invitees, customers, agents, employees, vendors, contractors, subcontractors, suppliers, patrons, or common carriers, and (2) any negligence or intentional misconduct of the Lessee or the Lessee's invitees, customers, agents, employees, vendors, contractors, subcontractors, suppliers, patrons, or common carriers, except to the extent that any such costs, expense or liability suffered by the Lessor was due solely to the negligence or intentional misconduct of the Lessor.

SECTION 13. QUIET ENJOYMENT; MORTGAGE PRIORITY

13.1

Lessor's Warranty. Lessor warrants that it is the owner of the leased premises, and has the right to lease them. Lessor will defend Lessee's right to quiet enjoyment of the leased premises from the lawful claims of all persons during the lease term.

13.2

Mortgage Priority. This lease is and shall be prior to any mortgage or deed of trust ("Encumbrance") recorded after the date of this lease and affecting the premises. However, if any lender holding such an Encumbrance requires that this lease be subordinate to the Encumbrance, then Lessee agrees that the lease shall be subordinate to the Encumbrance if the holder thereof agrees in writing with Lessee that so long as Lessee performs its obligations under this lease no foreclosure, deed given in lieu of foreclosure, or sale, pursuant to the terms of the Encumbrance, or other steps or procedures taken under the Encumbrance shall affect Lessee's rights under this lease. If the foregoing condition is met, Lessee shall execute the written agreement, and any other documents required by the holder of the Encumbrance to accomplish the purposes of this paragraph. If the premises are sold as a result of foreclosure of any Encumbrance thereon, or otherwise transferred by Lessor or any successor, Lessee shall attorn to the purchaser or transferee.

13.3

Estoppel Certificate. Either party will within TWENTY (20) days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified, and is in full force and effect, and specifying any modifications or alleged breaches by the other party. The Certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party of whom the certificate was requested, that the lease is in full force and effect, and has not been modified except as may be represented by the party requesting the certificate.

SECTION 14. ASSIGNMENT AND SUBLEASE

No part of the leased property may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means by the Lessee, without the prior written consent of Lessor, which consent of the Lessor can be withheld for any reason or no reason. If Lessee is a limited liability company or a corporation or any other type of legal entity, then no shareholder, partner, member or any other person controlling any interest in any such corporation, limited liability company, partnership or other legal entity shall have the right to transfer any interest in any such legal entity without the prior consent of Lessor, which consent shall not be unreasonably withheld. In the event that Lessor incurs attorney's fees, accountant fees or other professional fees in evaluating any proposed transfer of any (1) interest by any person of any ownership interest in the Lessee, or (2) any assignment or sublease regarding the premises, Lessee shall within ten (10) days of the receipt of any statement for any such professional fees and expenses, forthwith pay to Lessor all such fees of any professionals charged to Lessor by such professionals to evaluate any such proposed transfer of any interest in any legal entity or any proposed assignment or sublease regarding the premises whether or not the Lessor shall subsequently approve or disapprove any such proposed transfer of any ownership interest in the Lessee or any assignment or sublease regarding the premises or the Lease Agreement.

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SECTION 15. DEFAULT - THE FOLLOWING SHALL BE EVENTS OF DEFAULT:

15.1

Default in Rent. Failure of Lessee to pay any rent or other charge within TEN (1O) days after it is due. At no time is Lessor required to give any written notice to Lessee in the event that Lessee shall fail to pay when due any amount of base rent, monthly real property tax payment or monthly insurance premium payment.

15.2

Default in Other Covenants. Failure of Lessee to comply with any term or condition, or fulfill any obligation of the lease (other than the payment of rent or other charges) within TWENTY (20) days after written notice sent by Lessor or Lessor's agent pursuant to Section 18.3 specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the TWENTY (20) day period, this provision shall be complied with if Lessee begins correction of the default within the TWENTY (20) day period, and thereafter proceeds with reasonable diligence, and in good faith to effect the remedy as soon as practicable.

15.3

Insolvency. Insolvency of Lessee; an assignment by Lessee for the benefit of creditors; the filing by Lessee of a voluntary petition in bankruptcy; an adjudication that Lessee is bankrupt or the appointment of a receiver of the properties of Lessee; the filing of any involuntary petition or bankruptcy, and failure of Lessee to secure a dismissal of the petition within THIRTY (30) days after filing; attachment of or the levying of execution of the leasehold interest, and failure of Lessee to secure discharge of the attachment or release of the levy of execution within TEN (10) days. If Lessee consists of two or more individuals or business entities, the events of default specified in this Paragraph 15.3 shall apply to each individual or business entities, unless within TEN (10) days after an event of default occurs, the remaining individuals produce evidence satisfactory to Lessor that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Lessee under the lease.

15.4

Abandonment. Failure of Lessee for TEN (10) days or more to occupy the property for one or more of the purposes permitted under this lease unless such failure is excused under other provisions of this lease shall be an abandonment of the property.

SECTION 16. REMEDIES ON DEFAULT

16.1

Termination. In the event of a default the lease may be terminated at the option of the Lessor by written notice to Lessee. Whether or not the lease is terminated by the election of Lessor or otherwise, Lessor shall be entitled to recover damages from Lessee in regard to the Lessee's defaults, and Lessor may re-enter, take possession of the premises and the property and all parts thereof, and remove any persons or property by legal action or by self-help with the use of reasonable force, and without liability for damages, and without having accepted a surrender.

16.2

Reletting. Following re-entry or abandonment, Lessor may relet the premises, and in that connection may make any suitable alterations or refurbish the premises, or both, or change the character or use of the premises, but Lessor shall not be required to relet for any use or purpose other than that specified in the lease or which Lessor may reasonably consider injurious to the premises, or to any Lessee which Lessor may reasonably consider objectionable. Lessor may relet all or part of the premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession.

16.3

Damages. In the event of termination of the Real Estate Lease Agreement or of the lease, or the retaking of possession of the premises or the property following default, Lessor shall be entitled to recover immediately, without waiting until the due date of any future base rent or other amount, or until the date fixed for expiration of the lease term, the following amounts as damages:

(a) The loss of reasonable rental value, including but not limited to, all unpaid base rent, reimbursement of insurance premiums and expenses, reimbursement for repairs assumed by Lessor, all insurance costs, all real property taxes, utility charges and all other additional rent and damages of every type and kind owed by Lessee to Lessor from the date of Lessee's default until a new Lessee is, or with the exercise of reasonable efforts by Lessor could have been, secured and paying out to Lessor.

(b) The reasonable costs of re-entry and reletting, including without limitation the cost of any clean up, refurbishing, removal of Lessee's property and fixtures, or any other expense occasioned by Lessee's failure to quit the premises upon termination, and to leave them in the required conditioning, any remodeling costs, attorney's fees, court costs, Agent commissions, and advertising costs.

(c) Any excess of the value of the rent and all of Lessee's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet and continuing through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial.

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16.4

Right to Sue More Than Once. Lessor may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing.

16.5

Remedies Cumulative. The foregoing remedies shall be in addition to, and shall not exclude any other remedy available to Lessor under applicable law.

16.6

Lessor's Right to Cure Defaults. If Lessee fails to perform any obligation pursuant to this Agreement, Lessor shall have the option, but not a duty, to perform any such Lessee obligation after thirty (30) days prior written notice to Lessee. All of Lessor's expenditures to correct Lessee's default shall be reimbursed by Lessee on demand with interest at the rate of twelve percent (12%) simple interest per year from the date of the expenditure by Lessor. Such payment or action by Lessor shall in no way waive any other remedies available to Lessor because of any Tenant default.

SECTION 17. SURRENDER AT EXPIRATION

17.1

Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Lessee shall deliver all keys to Lessor, and surrender the leased premises in good order and repair, reasonable wear and tear excepted, and broom clean. Alterations constructed by Lessee with permission from Lessor shall not be removed or restored to original condition, unless the terms of permission for the alteration so require. Lessee's obligations under this paragraph shall be subordinate to the provisions of Section 10 related to destruction.

17.2

Fixtures.

(a) All fixtures, improvements or additions placed upon the leased premises during the lease term, other than Lessee's trade fixtures, shall, at Lessor's option, become the property of Lessor. If Lessor so elects, Lessee shall remove any or all fixtures which would otherwise remain the property of Lessor, and shall repair any physical damage resulting from the removal. If Lessee fails to remove such fixtures, Lessor may do so, and charge the cost to Lessee, with interest at the rate of twelve (12%) percent per annum, from the date of expenditure.

(b) Prior to expiration or termination of the lease term, Lessee shall remove all furnishings, furniture, and trade fixtures which remain its property. If Lessee fails to do so, this shall be an abandonment of the property, and Lessor may retain the property, and all rights of Lessee with respect to it shall cease, or, by notice in writing given to Lessee within TWENTY (20) days after removal was required, Lessor may elect to hold Lessee to its obligation or removal. If Lessor elects to require Lessee to remove, Lessor may effect a removal, and place the property in public storage for Lessee's account. Lessee shall be liable to Lessor for the cost of removal, transportation to storage, and storage costs, plus interest at the rate of twelve (12%) percent per annum, on all such expenses from the date of expenditure by Lessor.

17.3

Holdover.

(a) If Lessee does not vacate the leased premises at the time required, Lessor shall have the option to treat Lessee as a Lessee from month-to-month, subject to all of the provisions of this lease except the provisions for term and renewal. Failure of Lessee to remove fixtures, furniture, furnishing or trade fixtures which under this lease shall constitute a failure to vacate to which this paragraph shall apply if the property not removed will substantially interfere with occupancy of the premises by another Lessee or with occupancy by Lessor for any purpose, including preparation for a new Lessee. Lessee's monthly rent shall automatically increase to an amount equal to 150% of the last month's rental rate during the specified lease term, for any holdover period.

(b) If a month-to-month tenancy results from a holdover by Lessee under this Paragraph 17.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Lessor, given not less than TEN (10) days prior to the termination date which shall be specified in the notice. Lessee waives any notice which would otherwise be provided by law with respect to a month-to-month tenancy.

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SECTION 18. MISCELLANEOUS

18.1

Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision.

18.2

Attorney Fees In the Event of Civil Action. If any civil claim or any legal action of any kind is instituted in connection with any controversy arising out of or regarding this Real Estate Lease Agreement or any part thereof, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge as the prevailing party's reasonable attorney's fees at trial, on appeal or in regard to a Petition for Review. In addition, the prevailing party shall be entitled to recover it's attorney's fees at trial or on appeal in regard to any and all matters or proceedings in any Federal Bankruptcy Court or in regard to any Federal Bankruptcy law matter, Eminent Domain Matter or under any probate proceedings or in connection with any State or Federal Tax Liens. In addition, the prevailing party shall be entitled to an award of reasonable attorney's fees in regard to any Bankruptcy proceedings in which any such prevailing party obtains relief from an automatic stay or judicial stay or to enforce any right or obligation owed to the prevailing party. In addition, the prevailing party shall be entitled to an additional award of attorney's fees in any trial court, appellate court or any Bankruptcy Court reasonably estimated by the prevailing party and approved by any such court in regard to the enforcement of any judgment rendered in favor of the prevailing party.

18.3

Attorney fees In the Event of Lessor's Use of Attorney to Enforce Lease Terms Outside of Civil Action. In any legal action, other than civil action as per term 18.2 above, to enforce the terms of this lease, such as, for example, for collection of rent owed by lessee to lessor, or for reimbursement of costs due to damages to the premises cause by lessee, the Owner or agent shall be entitled to all reasonable costs incurred in connection with such action, including a reasonable attorney's fee, unless reversed, set aside, or modified pursuant to a subsequent civil action, subsequent settlement, or subsequent agreement.

18.4

Notices. Any notice required or permitted under this lease shall be given when actually delivered or FORTY-EIGHT (48) hours after deposited in United States mail as certified mail addressed to the address first given in this lease, or to such other address as may be specified from time to time by either of the parties in writing.

18.5

Succession. Subject to the above-stated limitations on transfer of Lessee's interest, this lease shall be binding upon and inure to the benefit of the parties, their respective successors, and assigns.

18.6

Recordation. This lease shall not be recorded without the prior written consent of the Lessor.

18.7

Entry for Inspection. Lessor, or Lessor's agent, shall have the right to enter upon the premises, during normal business hours, in a manner that does not interfere with Lessee's business or Lessee's customers, to determine Lessee's compliance with this lease, to make necessary repairs to the building or to the premises, or to show the premises to any prospective Lessee or purchase, and, in addition, shall have the right, at any time during the last four months of the term of this lease, to place and maintain upon the premises notices for leasing or selling the premises.

18.8

Interest on Rent or Other Charges. Any rent or other payment required of Lessee by this lease shall, if not paid within TEN (10) days after it is due, bear interest at the rate of twelve (12%) percent per annum from the due date until paid.

18.9

Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination, and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Lessee or paid on its account.

Page 11 of 13

SECTION 19. OTHER AGREEMENTS BETWEEN LESSEE AND LESSOR

●	Lessee is permitted to add second floor subject to city of Springfield permit. See Exhibit "A" for layout.

●

Property has one meter for electricity and one meter for natural gas. Lessor will determine pro-rata share of utility costs to be allocated for tenant's usage. Lessor will periodically review utility billing and make adjustments to allocations as necessary. Lessor shall notify Lessee of any change to the amount of Lessee's utility allocation in writing 10 days prior to the effective date of change. Lessor shall settle any disputes that may arise regarding utility allocation. Lessee is to install its own sub-electrical meter, the same as the other sub- meter in the facilities.

●	Lease option:

Lessee has the option to lease 7,560 square feet (54x140), see Exhibit "B", with a term of five (5) years from January 1, 2015 through December 31, 2019 at the rate of $0.45 per square foot. Rental payment shall commence on January 1, 2015.

Lessee is to notify Lessor by written notice no later than November 15, 2014 to confirm Lessee leasing said area. After November 15, 2014 the option is terminated.

Lessee is to pay Lessor $15,000.00 for option at lease signing. If option is exercised by November 15, 2014 the $15,000.00 option price is credited toward rent. If option is not exercised then option fee is forfeited to Lessor.

The rental rate for lease will control the rate for optioned area 7,560 per square feet at two percent (2%) per annum increase.

Lessee to provide corridor area, without charge, on Lessee's south wall for Lessor to construct a secure corridor for east tenant's employee's access to bathrooms. (See Exhibit B for location)

Lessor, or neighboring tenant, would have access to electrical panels during normal working hours in Lessee's area.

SECTION 20. ARBITRATION

If any dispute arises between Lessor and Lessee regarding matters pertaining to partial destruction, partial damage or partial taking, or rent abatement or rent reduction in regard thereto, such disputes shall be determined by arbitration. The arbitration of any disputes regarding this lease shall be restricted to the disputes described in Sections 10.1, 10.2, 10.3, 10.4 and 11.1 of this Lease Agreement unless the parties mutually agree in writing to resolve any other disputes pursuant to arbitration. Either Lessor or Lessee may request arbitration in the event that Lessor and Lessee are unable to resolve any dispute which is subject to resolution pursuant to arbitration as set forth in this Lease Agreement. For a period of ten (10) business days, not including Saturdays, Sundays and legal holidays, after a written request for arbitration is sent by either the Lessor or Lessee to the other party pursuant to Section 18.3, the parties shall attempt to agree upon the identity of the arbitrator who shall be an independent real estate appraiser or leasing agent, or other knowledgeable real estate professional with at least ten (10) years of experience. The parties shall thereafter promptly request in writing that the agreed upon professional real estate person agree to serve as an arbitrator in regard to any such disputed matter. If the parties are unable to agree on the identity of an arbitrator, each party shall select an arbitrator with the above described professional qualifications and the two arbitrators shall select a third arbitrator, unless the parties agree (1) to submit a list of qualified arbitrators to the presiding judge of the Circuit Court of the State of Oregon for Lane County, and (2) that the selection by said presiding judge of a single arbitrator shall be binding on the parties as to the identity of the arbitrator. The arbitrator or arbitrators shall proceed according to the Oregon Statutes governing arbitration, and the Oregon Rules of Civil Procedure and the local Lane County Court Rules if appropriate, shall apply in regard to the arbitration process, procedures and pleadings, if any. The award of the arbitrator or arbitrators shall have the effect as described in the Oregon Statues pertaining to arbitration. The arbitration shall in any event take place in Lane County, Oregon. The costs and fees of all arbitrators shall be shared and paid equally by Lessor and Lessee. Lessor and Lessee shall each pay their own attorney's fees and costs incurred in connection with the arbitration, regardless of the ruling, outcome or contents of any order or judgment entered in regard to the aforementioned arbitration.

SECTION 21. ADDENDUM

21.1

An addendum signed by both the Lessor and the Lessee is attached, is not attached hereto, and if attached becomes a part of this Lease Agreement.

Page 12 of 13

THIS IS A LEGALLY BINDING AGREEMENT. IF NOT UNDERSTOOD BY ANY PARTIES HERETO, THEY SHOULD SEEK COMPETENT LEGAL AND/OR ACCOUNTING ADVICE PRIOR TO SIGNING.

DATED this ____ day of ______________, ______

LESSOR:		LESSEE:

Oakway Golf Course, Inc.		Diego Pellicer Worldwide, Inc.



		/s/ Steve Hubbard
John P. Hammer, President		Steve Hubbard, CFO, Secretary

ADDRESS:	PO BOX 2266	ADDRESS:	3496 Fairview Way

CITY/STATE:	Eugene, OR ZIP:97402	CITY/STATE:	West Linn, OR: ZIP:97068

PHONE:	541-683-1166	PHONE:	206-427-4100

FAX:	541-683-2449	CELL:	503-635-7097

EMAIL:	jphammer@nu-world.com	EMAIL:	sshubbard@earthlink.net

		TAX ID #:	46-3547924

		S.S. 4:	549-78-5651

		O.D.L.:	4287672

		Alternate Contact: Ron Throgmartin 678-546-8598

Page 13 of 13

ADDENDUM A

FOR LEASE DATED SEPTEMBER 15, 2014

Lessor and Lessee acknowledge that lease dated August 26, 2014 is terminated between Lessor and Lessee as of the signing of that lease dated September 15, 2014.

The deposit of $18,000.00, $3,000.00 for security deposit, $5,000.00 for paid rent for August, September, and October, 2014, is transferred to lease dated September 15, 2014 as paid rent and deposit.

Lessor and Lessee acknowledge if Lessee exercises lease option for another 7,560 square feet by November 15, 2014, all terms of the September 15, 2014 lease apply to include lease options, rental rate per square feet, and all terms and conditions apply.

LESSOR:		LESSEE:

Oakway Golf Course, Inc.		Diego Pellicer Worldwide, Inc.

BY:	/s/ John P. Hammer	BY:	/s/ Steve Hubbard
	John P. Hammer, President		Steve Hubbard, CFO, Secretary

DATE:	9-24-14	DATE:	9/24/14

Exhibit 10.11

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 1 of 20

SUBLEASE AGREEMENT

THIS SUBLEASE AGREEMENT (the "Sublease”) is entered into and effective this 1^st day of March, 2014, between Diego Pellicer Worldwide Inc (“Tenant”), and Diego Pellicer, Inc. ("Subtenant”). Tenant entered into a lease (the “Master Lease") with M-P Properties as landlord ("Landlord”), dated September 19, 2013, leasing the premises legally described on the attached Exhibit 1 (“Master Premises”). A copy of the Master Lease, including all amendments, is attached as Exhibit 2. Tenant and Subtenant agree as follows:

SUBLEASE SUMMARY.

Subleased Premises. Tenant leases to Subtenant and Subtenant leases from Tenant that portion of the Master Premises consisting of an agreed area of 3,700 rentable square feet of area on the 1st & 2nd floor(s) of the Master Premises, outlined on the floor plan attached as Exhibit 3 (the “Subleased Premises"), and commonly known as Entire Building.

Sublease Commencement Date. The Sublease shall be for a period of 58 months and shall commence on March 1, 2014 or such earlier or later date as provided in Section 3 (the “Sublease Commencement Date").

Sublease Termination Date. The Sublease shall terminate at midnight on September 30, 2018 or one day prior to the termination date of the Master Lease, whichever is earlier, unless sooner terminated in accordance with the terms of this Sublease (the "Sublease Termination Date”).

Base Rent. Subtenant shall pay to Tenant base monthly rent (check one): ☐ $_________, or þ according to the Rent Rider attached hereto (“Base Rent”), Rent shall be payable at Tenant's address shown in Section 1(h) below, or such other place designated in writing by Tenant.

Prepaid Rent. Upon execution of this Sublease, Subtenant shall deliver to Tenant the sum of $0.00 as prepaid rent, to be applied to the Rent due for months __________ through ____________ of the Sublease.

Security Deposit. Upon execution of this Sublease, Subtenant shall deliver to Tenant the sum of $0.00 to be held as a security deposit pursuant to Section 5 below. The security deposit shall be in the form of (check one): ☐ cash, ☐ letter of credit according to the Letter of Credit Rider (CBA Form LCR), attached hereto, ☐ check.

Permitted Use. The Subleased Premises shall be used only for Sale & production of cannabis and related products, per Washington State law, and for no other purpose without the prior written consent of Tenant (The "Permitted Use”).

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 2 of 20

SUBLEASE AGREEMENT

Notice and Payment Addresses

Tenant: Diego Pellicer Worldwide Inc

21300 Victory Blvd, Suite 740

Woodland Hills CA 91367

Fax No.: ________________

Email: __________________

Subtenant: Diego Pellicer, Inc

2215 4th Avenue S,

Seattle, WA 98134

Fax No.: ________________

Email: __________________

Subtenant's Sublease Share. Subtenant’s Sublease Share of any operating costs, additional rent, or other amounts payable by Tenant under the Master Lease is 100% of such amounts, based upon the ratio of the agreed rentable area of the Subleased Premises to the agreed rentable area of the Master Premises

PREMISES.

Lease of Premises. Tenant leases to Subtenant, and Subtenant leases Tenant the Subleased Premises upon the terms specified in this Sublease.

Acceptance of Premises. Except as specified elsewhere in this Sublease, Tenant makes no representations or warranties to Subtenant regarding the Subleased Premises, including the structural condition of the Subleased Premises or the condition of all mechanical, electrical, and other systems on the Subleased Premises. Except for any Subtenant improvements described on attached Exhibit 4 to be completed by Tenant (“Tenant's Work”), Subtenant shall be responsible for performing any work necessary to bring the Subleased Premises into a condition satisfactory to Subtenant. By signing this Sublease, Subtenant acknowledges that it has had adequate opportunity investigate the Subleased Premises, acknowledges responsibility for making any corrections, alterations and repairs to the Subleased Premises (other than the Tenant's Work in Exhibit 4), and acknowledges that the time needed to complete any such items shall not delay the Sublease Commencement Date.

Subtenant Improvements. Attached Exhibit 4 sets forth all of Tenant's Work, if any, and all Subtenant improvements to be completed by Subtenant (the “Subtenant's Work”), that will be performed on the Subleased Premises. Responsibility for design, payment and performance of all such work shall be as set forth on attached Exhibit 4.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 3 of 20

SUBLEASE AGREEMENT

TERM. Subtenant acknowledges that Tenant may need to receive Landlord's consent to this Sublease as provided in Sections 21 and 24 of this Sublease prior to Subtenant occupying the Subleased Premises, and Subtenant shall not occupy the Subleased Premises without the prior written consent of Tenant. If Subtenant occupies the Subleased Premises before the Sublease Commencement Date specified in Section 1, then such date of occupancy shall be the Sublease Commencement Date. If Tenant acts diligently to make the Subleased Premises available to Subtenant, neither Tenant nor any agent or employee of Tenant shall be liable for any damage or Toss due to Tenant's inability or failure to deliver possession of the Premises to Subtenant as provided on this Sublease. In such case, the Rent shall abate until delivery of possession, but the Sublease Termination Date shall not be extended by such delay. Notwithstanding the foregoing, if Tenant has not delivered possession to Subtenant within 60 days (sixty (60) days if not filled in) after the date specified in Section 1, Subtenant may elect to cancel this Sublease by giving written notice to Tenant within ten (10) days after such time period ends, if Subtenant gives such notice, this Sublease shall be cancelled, all prepaid rent and security deposits shall be refunded to Subtenant, and neither Tenant nor Subtenant shall have any further obligations to the other.

RENT.

Payment of Rent. Subtenant shall pay Tenant without notice, demand, deduction or offset, in lawful money of the United States, the monthly Base Rental stated in Section 1 in advance on or before the first day of each month during the Sublease Term beginning on (check one): þ the Sublease Commencement Date, or ☐ _____________________ (if no date specified, then on the Sublease Commencement Date), and any otter additional payments due to Tenant (“Additional Rent”) (collectively the "Rent”) when required under this Sublease. Payments for any partial month at the beginning or end of the Sublease term shall be prorated. All payments due to Tenant under this Sublease, including late fees and interest, shall also constitute Additional Rent, and upon failure of Subtenant to pay any such costs, charges or expenses, Tenant shall have the same rights and remedies as otherwise provided in this Sublease for the failure of Subtenant to pay rent.

Late Charges; Default Interest. If any sums payable by Subtenant to Tenant under this Sublease are not received within five (5) days of their due date, Subtenant shall pay Tenant an amount equal to the sum which would be payable by Tenant to the Landlord for an equivalent default under the master Lease or five percent (5%) of the delinquent amount for the cost of collecting and handling such late payment in addition to the amount due and as Additional Rent, whichever is greater All delinquent sums not paid by Subtenant within five (5) business days of the due date shall, at Tenant's option, be interest at the rate the Tenant would pay the Landlord under the Master Lease for an equivalent default or the highest rate of interest allowable by law, whichever is less. Interest on all delinquent amounts shall be calculated from the original due dale to the date of payment.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 4 of 20

SUBLEASE AGREEMENT

Less Than Full Payment. Tenant's acceptance of less than the full amount of any payment due from Subtenant shall not be deemed an accord and satisfaction or compromise of such payment unless Tenant specifically consents in writing to payment of such lesser sum as an accord and satisfaction or compromise of the amount which Tenant claims. Any portion that remains to be paid by Tenant shall be subject to the late charges and default interest provisions of this Section.

SECURITY DEPOSIT. Upon execution of this Sublease, Subtenant shall deliver to Tenant the security deposit specified in Section 1 above. Tenant’s obligations with respect to the security deposit are those of a debtor and not of a trustee, and Tenant may commingle the security deposit with its other funds. If Subtenant breaches any covenant or condition of this Sublease, including but not limited to the payment of Rent, Tenant may apply all or any part of the security deposit to the payment of any sum in default and any damage suffered by Tenant as a result of Subtenant's breach. Subtenant acknowledges, however, that the security deposit shall not be considered as a measure of Subtenant’s damages in case of default by Subtenant and any payment to Tenant from the security deposit shall not be construed as a payment of liquidated damages for Subtenant's default. If Tenant applies the security deposit as contemplated by this Section, Subtenant shall, within five (5) days after written demand therefore by Tenant, deposit with Tenant the amount so applied. If Subtenant complies with all of the covenants and conditions of this Sublease throughout the Sublease term, the security deposit shall be repaid to Subtenant without interest within thirty (30) days after the surrender of the Subleased Premises by Subtenant in the condition required by Section 9 of this Lease.

MASTER LEASE. Tenant represents to Subtenant: (a) that Tenant has delivered to Subtenant a full and complete copy of the Master Lease and all other agreements between Landlord and Tenant relating to the leasing, use, and occupancy of the Subleased Premises (which may contain redacted business terms) and (b) that Tenant has received no uncured default notice from Landlord under the Master Lease. Tenant shall not agree to an amendment to the Master Lease which would have an adverse effect on Subtenant's occupancy of the Subleased Premises or its use of the Subleased Premises for their intended purpose, without obtaining Subtenant's prior written approval, which shall not be unreasonably withheld, conditioned, or delayed. Subtenant represents that it has read and is familiar with the terms of the Master Lease.

This Sublease is subject and subordinate to the Master Lease. If the Master Lease terminates, this Sublease shall terminate. Tenant and Subtenant shall not, by their omission or act, do or permit anything to be done which would cause a default under the Master Lease. If the Master Lease terminates or is forfeited as a result of a default or breach by Tenant or Subtenant under this Sublease and/or the Master Lease, then the defaulting party shall be liable to the non-defaulting party for the damage suffered as a result of such termination or forfeiture. Tenant shall exercise due diligence in attempting to cause Landlord to perform its obligations under the Master Lease for the benefit of the Subtenant.

All the terms, covenants and conditions contained in the Master Lease are incorporated into and made a part of this Sublease as if Tenant were the landlord under the Master Lease, the Subtenant were the tenant under the Master Lease, and the Subleased Premises were the Master Premises except as may be inconsistent with the terms contained in this Sublease and the following: Sublessor may cancel sublease, in Sublessors sole & absolute discretion, by giving Subtlessee 90 days written notice (none if not specified).

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 5 of 20

SUBLEASE AGREEMENT

ADDITIONAL CHARGES. If Tenant shall be charged for additional rent or other sums pursuant to the provisions of the Masker Lease, Subtenant shall be liable for its Sublease Share, stated in Section 1 above, of such additional rent or sums, including without limitation, payments for taxes, common area charges, utilities and services, or operating costs. If any such rent or sums shall be due to excessive use by Subtenant of utilities or services provided to the Subleased Premises, as reasonably determined by Tenant, such excess shall be paid in its entirety by Subtenant. If Subtenant shall procure any additional service for the Subleased Premises, including but not limited to after-hour HVAC services, Subtenant shall pay for same at the rates charged by Landlord and shall make such payment to Tenant or Landlord, as Tenant shall direct. Tenant shall have no duty to perform any obligations which are, by their nature, the obligation of an owner or manager of real property. Any rent or other sums payable by Subtenant under this Section shall be Additional Rent and paid to Tenant no later than five (5) days before they are due from Tenant to Landlord. If Tenant shall receive any refund for Additional Rent or sums paid under the Master Lease, Subtenant shall be entitled to the return of so much thereof as shall be attributable to prior payments by Subtenant. Tenant shall, upon request by Subtenant furnish Subtenant with copies of all statements submitted by Landlord of actual or estimated Additional Rent or sums.

Notwithstanding anything herein, contained, the only services or utilities to which Subtenant is entitled under this Sublease are those to which Tenant is entitled under the Master Lease.

ALTERATIONS. Subtenant may make alterations, additions or improvements to the Subleased Premise, including any of Subtenant's Work identified on attached Exhibit 4 (the “Alterations”), with the prior written consent of Tenant. The term “Alterations" shall not include the installation of shelves, movable partitions, Subtenant’s equipment, and trade fixtures which may be performed without damaging existing improvements or the structural integrity of the Subleased Premises, and Tenant's consent shall not be required for Subtenant's installation of those items except to the extent Tenant must obtain the consent of Landlord under the Master Lease for such installations. Subtenant shall perform all work within the Subleased Premises at Subtenant's expense in compliance with all applicable laws and shall complete all Alterations in accordance with plans and specifications approved by Tenant, using contractors approved by Tenant, and in a manner so as to not unreasonably interfere with other tenants. Subtenant shall pay, when due, all claims for labor or materials furnished to or for Subtenant at or for use in the Subleased Premises, which claims are or may be secured by any mechanics' or materialmens’ liens against the Subleased Premises or any interest therein. Subtenant shall remove all Alterations at the end of the Sublease term unless Tenant conditioned its consent upon Subtenant leaving a specified Alteration at the Subleased Premises, in which ease Subtenant shall not remove such Alteration and it shall become Landlord's property. Subtenant shall in repair any damage to the Subleased Premises caused by removal of Alterations.

REPAIRS AND MAINTENANCE; SURRENDER. Subtenant shall, at its sole expense, maintain the Subleased Premises in good condition and promptly make all repairs and replacements, whether structural or non-structural, necessary to keep the Subleased Premises safe and in good condition, including all utilities and other systems serving the Subleased Premises. Subtenant shall not damage any demising wall or disturb the structural integrity of the Subleased Premises and shall promptly repair any damage or injury done to any such demising walls or structural elements caused by Subtenant or its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees. If Subtenant fails to maintain or repair the Subleased Premises, Tenant may enter the Subleased Premises and perform such repair or maintenance on behalf of Subtenant In such case, Subtenant shall be obligated to pay to Tenant immediately upon receipt of demand for payment as additional Rent all costs incurred by Tenant, Subtenant shall only be obligated to repair or maintain those portions of the Subleased Premises as provided in the Master Lease. Tenant shall not be required to perform changes to the Subleased Premises because of the enactment of any law, ordinance, regulation or code during the Sublease term. Notwithstanding anything in this Section to the contrary, Subtenant shall not be responsible for any repairs to the Subleased Premises made necessary by the acts of Tenant, Landlord or their employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 6 of 20

SUBLEASE AGREEMENT

Upon expiration of the Subleased Lease term, whether by lapse of time or otherwise, Subtenant shall promptly and peacefully surrender the Subleased Premises, together with all keys, to Tenant in as good condition as when received by Subtenant or as thereafter improved, reasonable wear and tear and insured casualty excepted.

10.

ACCESS AND RIGHT OF ENTRY. After reasonable notice from Tenant (except in cases of emergency, where no notice is required), Subtenant shalt permit Tenant and/or Landlord and their agents, employees and contractors to enter the Subleased Premises at all reasonable times to make repairs, alterations, improvements or inspections. This Section shall not impose any repair or other obligation upon Tenant not expressly stated elsewhere in this Sublease After reasonable notice to Subtenant, Tenant or Landlord shall have the right to enter the Subleased Premises for the purpose of (a) showing the Subleased Premises to prospective purchasers or lenders at any time, and to prospective tenants within one hundred eighty (180) days prior to the expiration or sooner termination of the Sublease term; and (b) for posting “for lease" signs within one hundred eighty (180) days prior to the expiration or sooner termination of the Sublease term.

11.

DESTRUCTION OR CONDEMNATION.

Damage and Repair. If Landlord or Tenant terminate the Master Lease based on casualty to the property in accordance with the Master Lease, this Sublease shall terminate on the same date. If the Subleased Premises or the portion of the property necessary for Subtenants occupancy are damaged, destroyed or rendered untenantable, by fire or other casualty, Tenant may, at its option: (a) terminate this Sublease, or (b) restore (or cause Tenant to restore) the Subleased Premises and the portion of the property necessary for Subtenant’s occupancy to their previous condition. Provided, however, if such casualty event occurs during the last six (6) months of the Sublease term (after considering any option to extend the term timely exercised by Subtenant) then either Subtenant or Tenant may elect to terminate this Sublease. If, within sixty (60) days after receipt by Tenant from Subtenant of written notice that Subtenant deems the Subleased Premises or the portion of the property necessary for Tenant's occupancy untenantable. Tenant fails to notify Subtenant of its election to restore those areas, or if Tenant is unable to restore those areas within six (6) months of the date of the casualty event, then Subtenant may elect to terminate this Sublease

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 7 of 20

SUBLEASE AGREEMENT

If Tenant restores the Subleased Premises or the property under this Section, Tenant shall proceed with reasonable diligence to complete the work, and the base lent shall be abated in the same proportion as the untenantable portion of the Subleased Premises bears to the whole Subleased Premises, provided that there shall be a rent abatement only if the damage Of destruction of the Subleased Premises or the property did not result from, or was not contributed to directly or indirectly by the act, fault or neglect of Subtenant or Subtenant's employees, officers, agents, servants, contactors, customers, clients, visitors, guests, or other licensees or invitees. Provided, if Tenant complies with its obligations under this Section, no damages, compensation or claim shall be payable by Tenant for inconvenience, loss of business or annoyance directly, incidentally or consequentially arising from any repair or restoration of any portion of the Subleased Premises or the property. Tenant shall have no obligation to carry insurance of any kind for the protection of Subtenant Or any alterations or improvements paid for by Subtenant; any Subtenants Work identified in Exhibit 4 (regardless of who may have contemplated them); Subtenants furniture; or on any fixtures, equipment improvements or appurtenances of Subtenant under this Lease. and Tenant shall not be obligated to repair any damage thereto or replace the same unless the damage is caused by Tenant's negligence.

Condemnation. If the Landlord or Tenant terminate the Master Lease based on a provision in the Master Lease relating to eminent domain or conveyance under threat of condemnation, this Sublease shall terminate on the same date if the Sub teased Premises, the portion of the property necessary far Subtenants occupancy, or 50% or more of the rentable area of the property are made untenantable by eminent domain, or conveyed under a threat of condemnation, this Sublease shall terminate at the option of Tenant or Subtenant as of the earlier of the date title vests in the condemning authority or the condemning authority first has possession of the portion of the property taken by the condemning authority. All Rent and other payments shall be paid to that date.

If the condemning authority takes a portion of the Subleased Premises or the portion of the property necessary for Subtenant's occupancy That does not render them untenantable, then this Sublease shall continue in full force and effect and the base Rent shall be equitably reduced based on the proportion by which the floor area of any structures is reduced. The reduction in Rent shall be effective on the earlier of the date the condemning authority first has possession of Such portion or title vests in the condemning authority. The Subleased Premises or the portion of the property necessary for Subtenant's occupancy shall riot be deemed untenantable if 25% or less of each of those areas IS condemned, As between Tenant and Subtenant, Tenant shall be entitled to the entire award from the condemning authority attributable to the value of the Subleased Premises or the property and Tenant shall make no claim for the value of its leasehold. Subtenant shall be permitted to make a separate claim against the condemning authority for moving expenses or damages resulting from interruption in its business if Subtenant may terminate this Sublease under this Section, provided that in no event shall Subtenant's claim reduce Landlord's or Tenant's award.

12.

INSURANCE. Subtenant shall procure and maintain, at its own cost and expense, such liability insurance as is required to be carried by Tenant under the Master Lease, naming Tenant as well as Landlord, as additional insureds, in the mariner required therein, and property ir8urance as is required to be carried by Tenant under the Master Lease to the extent property insurance pertains to the Subleased Premises. If the Master Lease requires Tenant to insure leasehold improvements or alterations, then Subtenant shall insure the leasehold improvements which are located in the Subleased Premises, as well as alterations in the Subleased Premises made by Subtenant, Subtenant shall furnish to Tenant a certificate of Subtenant's insurance required hereunder not later than ten (10) days prior to Subtenant's taking possession of the Subleased Premises. Tenant shall carry insurance as required by the Master Lease and shall not be obligated to carry fire or other insurance if Landlord is obligated to carry it under the Pilaster Lease.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 8 of 20

SUBLEASE AGREEMENT

Tenant and Subtenant hereby release each other and any other tenant, their employees, officers, agents, servants, contractors, customers, chants, visitors, guests, or other licensees or invitees, from responsibility for and waive their entire claim of recovery for any loss or damage arising from any cause covered by property insurance required to be carried by each of then Each party shall provide notice to the property insurance carrier or carriers of this mutual waiver of subrogation, and shall cause its respective property insurance carriers to waive all rights of subrogation against the other. This waiver shall not apply to the extent of the deductible amounts to any such policies or lo the extent of liability exceeding the limits of such policies. Tenant agrees to use reasonable efforts to obtain from Landlord the same waives of claims for any loss or damage arising from any cause covered by property insurance required to be serried by Landlord under the Master Lease and, if and to the extent of such waiver by Landlord, Subtenant agrees to the same waiver.

13.

ASSIGNMENT AND SUBLETTING. Subtenant shall not assign, sublet encumber or otherwise transfer any interest in this Sublease or any part of the Subleased Premises (collectively referred to as a "Transfer), without first obtaining the written consent of Tenant, which shall not be unreasonably withheld or delayed Tenant may condition its consent on (a) obtaining any required consent from Landlord; and (b) Subtenant satisfying any conditions OR the Transfer imposed by Landlord; and (c) such other reasonable conditions that. Tenant may impose. No Transfer shall relieve Subtenant of any liability under this Sublease notwithstanding Tenant's consent lo such Transfer Consent to any Transfer shall not operate as a waiver of the necessity for Tenant's consent to any subsequent Transfer. In connection with each request for consent to a Transfer, Subtenant shall pay the reasonable cost of processing same, including attorneys' fees and any cost charged by Landlord for granting its consent under the Master Lease, upon demand of Tenant.

If Subtenant is a partnership, limited liability company, corporation, or Other entity, any transfer of this Sublease by merger, consolidation, redemption or liquidation, or any change in the ownership of. or power to vote, which singularly or collectively represents a majority of the beneficial interest in Subtenant, snail Coils^-Mute a Transfer.

As a condition to the Landlord's and Tenant's approval, if given, any potential assignee of sublease otherwise approved shall assume all obligations of Subtenant under this Sublease and shalt be jointly and severally liable with Subtenant and any guarantor, if required, for the payment of Rent and other charges due hereunder and performance of all terms of this Sublease. In connection with any Transfer, Subtenant shall provide Landlord and Tenant with copies of all assignments, subleases and assumption agreements and documents.

14.

MORTGAGE SUBORDINATION AND ATTORNMENT. This Sublease shall automatically be subordinate to any mortgage or deed of trust created by Landlord to the extent the Master Lease is subordinate la the same mortgage or deed of trust, arid Subtenant shall attorn on the same terms and conditions as the Tenant in the Master Lease, provided Subtenant shall enjoy the terms and conditions relating to such subordination and attornment to the same extent Tenant does under the terms of the Master Lease.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 9 of 20

SUBLEASE AGREEMENT

15.

HOLDOVER. If Subtenant shall, without the written consent of Tenant, remain in possession of the Subleased Premises and fail to return the Premises to Landlord after the expiration or teerndnabon of the Sublease, the tenancy shall be a holdover tenancy and shall be on a miTirrth-lb-month basis, which may be terminated accoitfing to Washington law. Unless a different rate is agreed upon by Tenant, Subtenant agrees to pay to Tenant 150% of the rate of Rent last payable under this Sublease or the holdover rental rate provided in the Master Lease, whichever is greater during any holdover tenancy, AM other terms of the Sublease sham remain in effect.

16.

NOTICES. All notices under this Sublease shall be in 'writing and effective (I) when delivered in person or via overnight courier to the other party, (ii) three (3) days after being sent by registered or certified mail to the other party at the addresses set forth in Section 1; or upon confirmed transmission by facsimile to the other party at the facsimile numbers set forth in Section 1. The addresses for notices and payment of Rent set forth in Section 1 may be modified by either party only by written notice delivered in conformance with this Section.

17.

ESTOPPEL CERTIFICATES. Upon the written request of Tenant, Subtenant shall deliver to Tenant endear Landlord or heir designee a written estoppel certificate on the same terms and conditions as required by Tenant under the Master Lease.

18.

GENERAL.

Heirs and Assigns. This Sublease shall apply to and be binding upon Tenant and Subtenat and their respective heirs, executors, administrators, successors and assigns.

Brokers' Fees. Subtenant represents and warrants to Tenant that except for Subtenant's Broker, if any, described and disclosed in Section 20 of this Lease, it has not engaged any firm, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Sublease and shall indemnify and hold harmless Tenant against any loss, cost, liability or expense incurred by Tenant as a result of any claim asserted by any such firm, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Subtenant. Tenant represents and warrants to Subtenant that except for Landlord's Broker, if any, described and disclosed in Section 20, it has not engaged any firm, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Sublease and shall indemnify and hold harmless Subtenant against any loss, cost, liability or expense incurred by Subtenant as a result of any claim asserted by any such firm, finder or other person on the basis of any arrangement or agreements made or alleged in have been made by or on behalf of Tenant.

Entire Agreement. This Sublease, which incorporates portions of the Master Lease, contains all of the covenants and agreements between Tenant and Subtenant relating to the Subleased Premises. No prior or contemporaneous agreements or understandings pertaining to the Sublease shall be valid or of any force or effect and the covenants and agreements of this Sublease shall not be altered, modified, or amended to except in writing signed by Tenant and Subtenant.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 10 of 20

SUBLEASE AGREEMENT

Governing Law. This Sublease shall be governed by and construed in accordance with the laws of the State of Washington.

Memorandum of Sublease. Except for the pages containing the Commission Agreement, the Legal descriptions, and the signatures of the Tenant and Subtenant (all of which may be recorded by Tenants Broker), this Sublease shall not be recorded. However, if permitted by the Master Lease, Tenant and Subtenant shall, at the other's request, execute and record a memorandum of Sublease in recordable form that identifies Tenant and Subtenant, ire commencement and termination dates of the Sublease, and the legal description of the Master Premises and Subleased Premises.

Submission of Sublease Form Not an Offer. One party's submission of this Sublease to the other for review shall not constitute an offer to sublease the Subleased Premises. This Sublease shall not become effective and binding upon Tenant and Subtenant until It has been fully signed by both Tenant and Subtenant, and consented to by Landlord (if required by the Master Lease).

Authority of Parties. Each party signing this Sublease represents and warrants to the other that it has the authority to enter into this Sublease, that the execution and delivery of this Sublease has been duly authorized, and that upon such execution and delivery this Lease shall be binding upon and enforceable against the party on signing.

19.

EXHIBITS AND RIDERS. The following exhibits and riders are made a pat of this Sublease:

Exhibit 1: Legal Description of the Master Premises

Exhibit 2: Master Lease

Exhibit 3: Outline of Subleased Presnises

Exhibit 4: Tenant Improvement Schedule

Other: Rent Rider

20.

AGENCY DISCLOSURE. At the signing of this Lease,

Tenant is represented by N/A (insert name of Broker and Firm as licensed) (the “Tenant's Broker”);

and Subtenant is represented by N/A (insert name of Broker and Firm as licensed) (the "Subtenant's Broker”).

This Agency Disclosure creates an agency relationship between Subtenant, Subtenants Broker (if any such person is disclosed), and any managing brokers who supervise Subtenant's Broker's performance (collectively the "Supervising Brokers"). In addition, this Agency Disclosure creates an agency relationship between Tenant, Tenant's Broker (if any such person is disclosed), and any managing brokers who supervise Tenant's Broker’s performance (also collectively the 'Supervising Brokers"). If Tenants Broker and Subtenant's Broker are different real estate licensees affiliated with the same Firm, then both Tenant and Subtenant confirm their consent to that Firm and bah Tenant's and Subtenant's Supervising Brokers acting as dual agents. If Tenant's Broker and Subtenant's Broker are the same real estate licensee who represents both parties, then both Subtenant and Tenant acknowledge that the Broker, his or her Supervising Brokers, and his or her Firm are acting as dual agents and hereby consent to such dual agency, If Tenant's Broker, Subtenants Broker, their Supervising Brokers, or their Firm are dual agents Subtenant and Tenant consent to Tenant's Broker, Subtenant's Broker, and their Firm being compensated based on a percentage of the rent or as otherwise disclosed on an attached addendum. Neither Tenant's Broker, Subtenant's Broker nor either of their Firms are receiving compensation from mete than one party to this transaction unless otherwise disclosed on an attached addendum, in which case Subtenant and Tenant consent to such compensation Subtenant and Tenant confirm receipt of the pamphlet entitled “The Law of Real Estate Agency.”

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 11 of 20

SUBLEASE AGREEMENT

21.

CONSENT BY LANDLORD. This Sublease shall be of no force or effect unless consented to by Landlord within 10 days of execution, if such consent is required under the Master Lease. Tenant and Subtenant agree for the benefit of Landlord, that this Sublease and Landlord's consent shall not (a) create privity of contract between Landlord and Subtenant; (b) be deemed to have amended the Master Lease in any regard (unless Landlord shall have expressly agreed in writing to such amendment); or (c) be construed as a consent by Landlord to any future assignment or subletting Landlord's consent shaft, however. be deemed evidence of Landlord's agreement that Subtenant may use the Subleased Premises for the purpose set forth in Section 1(g) and that Subtenant shall be entitled to the waiver of claims and of the right of subrogation as provided in Section 12, Insurance, above.

22.

COMMISSION AGREEMENT. If Tenant has not entered into a Irsbng agreement (or other compensation agreement with Tenants Firm). Tenant agrees to pay a commission to Tenants Firm (as identified in the Agency Disclosure Section above) as follows:

☐ $N/A

☐ N/A% of the gross rent payable pursuant to this Sublease

☐ $N/A per square foot of the Subleased Premises

☐ Other N/A

Tenant's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled to a commission upon the extension by Subtenant of the Sublease term pursuant to any right reserved to Subtenant under the Sublease calculated ☐ as provided above or ☐ as follows___________________ (if no box is checked, as provided above). Tenant's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled to a commission upon any expansion of the Subleased Premises pursuant to any right reserved to Subtenant under the Sublease, calculated ☐ as provided above or ☐ as follows ____________________ (if no box is checked, as provided above).

Any commission shall be earned upon execution of this Sublease and paid one-half upon execution of the Sublease and one-half upon occupancy of the Subleased Premises by Subtenant Tenant's Broker shall pay to Subtenant's Broker (as identified in the Agency Disclosure section above), the amount stated in a separate agreement between them or, if there is no agreement $N/A of% (complete only one) of any commission paid to Tenants Broker, within live (5) days after receipt by Tenants Broker.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 12 of 20

SUBLEASE AGREEMENT

If any other lease or sale is entered into between Tenant and Subtenant pursuant to a right reserved to Subtenant under the Sublease, Tenant ☐ shall ☐ shall not (shall not if not filled in) pay an additional commission according to any commission agreement or, in the absence of one, according to Tenant's Broker's commission schedule in effect as of the execution of this Sublease Tenant's successor shall be obligated to pay any unpaid commissions upon any, transfer of this Sublease and any such transfer shall not release the transferor from liability to pay such commissions.

23.

BROKER PROVISIONS.

TENANTS BROKER AND SUBTENANT'S BROKER HAVE MADE NO REPRESENTATIONS OR WARRANTIES CONCERNING THE SUBLEASED PREMISES; THE MEANING OF THE TERMS AND CONDITIONS OF THIS SUBLEASE; LANDLORD'S, TENANTS OR SUBTENANT'S FINANCIAL STANDING; ZONING; COMPLIANCE OF THE SUBLEASED PREMISES WITH APPLICABLE LAWS; SERVICE OR CAPACITY OF UTILITIES, OPERATING COSTS; OR HAZARDOUS MATERIALS. LANDLORD, TENANT AND SUBTENANT ARE EACH ADVISED TO SEEK INDEPENDENT LEGAL ADVICE ON THESE AND OTHER MATTERS ARISING TINDER THIS SUBLEASE.


	TENANT:		SUBTENANT:

	Diego Pellicer Worldwide Inc		Diego Pellicer, Inc.
	TENANT:		SUBTENANT:

	Ron Throgmartin		Peter Norris
	By:		By:

	Chief Executive Officer		Chief Executive Officer
	Its:		Its:

24.

LANDLORD'S CONSENT.

Landlord consents to the foregoing Sublease without wavier of any restriction in the Master Lease concerning further assignment, subletting or transfer. Landlord represents that the Master Lease constitutes the entire agreement of Landlord and Tenant concerning the leasing of the Master Premises and has not been amended or modified except as expressly set forth in Exhibit 2. Landlord further represents that, to Landlord's knowledge, Tenant is currently in full compliance with its obligations under the Master Lease.

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 13 of 20

SUBLEASE AGREEMENT


	LANDLORD:


	LANDLORD:


	By:


	Its:

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 14 of 20

SUBLEASE AGREEMENT

	)
STATE OF WASHINGTON	)	SS.
COUNTY OF________________________	)

I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me and said person acknowledged that____________________________ signed this instrument, on oath stated that _______________________ was authorized to execute the instrument and acknowledged it as the________________________________________________ of ____________________________to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated this___________________________ day of___________________________, 20_____,


	(Signature of Notary)

	(Legibly Print or Stamp Name of Notary)
	Notary public in and for the state of Washington,
	residing at___________________________
	My appointment expires______________________

	)
STATE OF WASHINGTON	)	SS.
COUNTY OF________________________	)

I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me and said person acknowledged that _____________________________________ signed this instrument, on oath stated that_____________________________________ was authorized to execute the instrument and acknowledged it as the_________________________ of_______________________ to be the free and voluntary act of such party for the uses and purposes rnentioned in the instrument

Dated this___________________________ day of___________________________, 20_____,


	(Signature of Notary)

	(Legibly Print or Stamp Name of Notary)
	Notary public in and for the state of Washington,
	residing at___________________________
	My appointment expires______________________

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 15 of 20

SUBLEASE AGREEMENT

	)
STATE OF WASHINGTON	)	SS.
COUNTY OF________________________	)

I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me and said person acknowledged that____________________________ signed this instrument, on oath stated that _______________________ was authorized to execute the instrument arid acknowledged it as the________________________________________________ of ____________________________to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated this___________________________ day of___________________________, 20_____,


	(Signature of Notary)

	(Legibly Print or Stamp Name of Notary)
	Notary public in and for the state of Washington,
	residing at___________________________
	My appointment expires______________________

	)
STATE OF WASHINGTON	)	SS.
COUNTY OF________________________	)

I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me and said person acknowledged that _____________________________________ signed this instrument, on oath stated that_____________________________________ was authorized to execute the instrument and acknowledged it as the_________________________ of_______________________ to be the free and voluntary act of such party for the uses and purposes rnentioned in the instrument

Dated this___________________________ day of___________________________, 20_____,


	(Signature of Notary)

	(Legibly Print or Stamp Name of Notary)
	Notary public in and for the state of Washington,
	residing at___________________________
	My appointment expires______________________

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 16 of 20

SUBLEASE AGREEMENT

EXHIBIT 1

[Legal Description of Master Premises]

Exhibit 1

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 17 of 20

SUBLEASE AGREEMENT

EXHIBIT 2
[Master Lease]

Exhibit 2

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 18 of 20

SUBLEASE AGREEMENT

EXHIBIT 3

[Outline of the Subleased Premises]

Exhibit 3

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 19 of 20

SUBLEASE AGREEMENT

EXHIBIT 4

[Subtenant Improvement Schedule]

1. Subtenant Improvements to be Completed by Tenant

2. Subtenant Improvements to be Completed by Subtenant

Regency Group, Inc.
Commercial Real Estate
12301 NE 10th PI, Suite 301
Bellevue, WA 98005
Phone: (425) 454-4000
Fax: (425) 451-1642

Association 2011

CBA Form SUB-LS

Sublease Agreement

Page 20 of 20

Rent Rider

This Rent Rider ("Rider") is a part of the lease agreement dated March 1, 2014 (the "Lease") between Diego Pellicer Worldwide Inc, ("Sublessor") and Diego Pellicer Inc. ("Sublessee concerning the space commonly known as the "Premises", located at the property commonly known as 2215 4th Avenue S., Seattle, WA 98134 (the "Property).

Base Monthly Rent Schedule. Sublessee shall pay Sublessor base monthly rent during the Sublease Term according to the following schedule:

Lease Year (Stated in Years or Months)		Base Monthly Rent Amount

03/01/14 - 09/30/14		$0.00
10/01/14 - 09/30/15		$12,420.00 plus NNN
10/01/15 - 09/30/16		$12,854.70 plus NNN
10/01/16 - 09/30/17		$13,304.62 plus NNN
10/01/17 - 09/30/18		$13,770.28 plus NNN

Initials: Sublessor Date: 03/01/14 Sublessee Date:

Exhibit 10.12

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, Sublessor has entered into a commercial lease agreement with the Lessor (M&S, LLC) for a period starting from July 1st, 2014 and ending on June 30, 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 4242 Elizabeth St, Denver, Colorado, 80216 and described as a +/- 18,500 square foot warehouse-type structure, (the "Premises").

Term:

The term of this Commercial sublease shall commence on the 1st day of July, 2014 and shall continue until the 30th of June, 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 $39,450 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 personal property insurance, and wastewater taxes are due each month as additional rent to Sublessor.

Late Charges:

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 $197,250 (One Hundred Ninety Seven Thousand Two Hundred and Fifty 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.

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:

Quiet Enjoyment:

Repairs:

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:

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

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;

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.

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.

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.

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.

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:

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.

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.

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.

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:

Governing Law:

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

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:

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

Exhibit 10.13

COMMERCIAL SUBLEASE AGREEMENT

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:

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:

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.

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:

Repairs:

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:

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

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.

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:

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

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

Ventilation and Odor Control:

●

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

●

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

●

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

●

Other Standard Practices

●

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:

Entire Agreement:

Governing Law:

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

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:

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

Exhibit 10.14

COMMERCIAL SUBLEASE AGREEMENT

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:

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:

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.

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:

Quiet Enjoyment:

Repairs:

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.

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.

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:

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

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.

	●	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.

●

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

●

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:

Entire Agreement:

Governing Law:

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

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:

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.

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

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

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

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

Exhibit 10.15

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 1 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

THIS LEASE AGREEMENT (the "Lease") is entered into and effective as of this 19th day of September, 2013, between M-P Properties ("Landlord"), and Diego Pellicer Worldwide, Inc., a Delaware corporation ("Tenant"). Landlord and Tenant agree as follows:

1. LEASE SUMMARY.

a. Leased Premises. The leased commercial real estate (the "Premises") consist of the real property legally described on attached Exhibit A, and all improvements thereon, and commonly described as 2215 4^th Ave S., Seattle, WA 98134.

b. Lease Commencement Date. The term of this Lease shall be for a period of sixty (60) months and shall commence on October 1, 2013 or such earlier or later date as provided in Section 3 (the "Commencement Date").

c. Lease Termination Date. The term of this Lease shall terminate at midnight on September 30, 2018 or such earlier or later date as provided in Section 3 (the "Termination Date"). Tenant shall have no right or option to extend this Lease, unless otherwise set forth in a rider attached to this Lease (e.g., Option to Extend Rider, CBA Form OR).

d. Base Rent. The base monthly rent shall be (check one): ☐ $ , or ☒ according to the Rent Rider attached hereto ("Base Rent"). Rent shall be payable at Landlord's address shown in Section 1(h) below, or such other place designated in writing by Landlord.

e. Prepaid Rent. Upon execution of this Lease, Tenant shall deliver to Landlord the sum of $15.648.32 as prepaid REAL ESTATE TAXES & INSURANCE FOR OCTOBER 2013. THIS PREPAID RENT SHALL ALSO BE APPLIED TO BASE RENT, REAL ESTATE TAXES AND INSURANCE FOR NOVEMBER 2013 AND SEPTEMBER 2018 (2 MONTHS) of the Lease. REAL ESTATE TAXES AND INSURANCE ARE ESTIMATES AND MAY BE ADJUSTED ACCORDINGLY.

f. Security Deposit. Upon execution of this Lease, Tenant shall deliver to Landlord the sum of $20.000.00 to be held as a security deposit pursuant to Section 5 below. The security deposit shall be in the form of (check one): ☒ cash, or ☒ letter of credit according to the Letter of Credit Rider (CBA Form LCR) attached hereto.

g. Permitted Use. The Premises shall be used only for lawful production and sale of cannabis and other related products and for no other purpose without the prior written consent of Landlord (the "Permitted Use").

h. Notice and Payment Addresses.

Landlord: M-P Properties PO Box 306

Carnation, WA 98014

Fax No.:

Email:

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 2 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

Tenant: Diego Pellicer Worldwide, Inc.

2215 4^th Ave S.

Seattle, WA 98134

Fax No.:

Email:

2. PREMISES.

a. Lease of Premises. Landlord leases to Tenant, and Tenant leases from Landlord the Premises upon the terms specified in this Lease.

b. Acceptance of Premises. Except as specified elsewhere in this Lease, Landlord makes no representations or warranties to Tenant regarding the Premises, including the structural condition of the Premises or the condition of all mechanical, electrical, and other systems on the Premises. Except for any tenant improvements to be completed by Landlord as described on attached Exhibit B (the "Landlord's Work"), Tenant shall be responsible for performing any work necessary to bring the Premises into a condition satisfactory to Tenant. By signing this Lease, Tenant acknowledges that it has had an adequate opportunity to investigate the Premises; acknowledges responsibility for making any corrections, alterations and repairs to the Premises (other than the Landlord's Work); and acknowledges that the time needed to complete any such items shall not delay the Commencement Date.

c. Tenant Improvements. Attached Exhibit B sets forth all Tenant's Work, if any, and all tenant improvements to be completed by Tenant (the "Tenant's Work"), if any, that will be performed on the Premises. Responsibility for design, payment and performance of all such work shall be as set forth on attached Exhibit B. If Tenant fails to notify Landlord of any defects in the Landlord's Work within thirty (30) days of delivery of possession to Tenant, Tenant shall be deemed to have accepted the Premises in their then condition. If Tenant discovers any major defects in the Landlord's Work during this 30-day period that would prevent Tenant from using the Premises for the Permitted Use, Tenant shall notify Landlord in writing and the Commencement Date shall be delayed until after Landlord has notified Tenant that Landlord has corrected the major defects and Tenant has had five (5) days to inspect and approve the Premises. The Commencement Date shall not be delayed if Tenant's inspection reveals minor defects in the Landlord's Work that will not prevent Tenant from using the Premises for the Permitted Use. Tenant shall prepare a punch list of all minor defects in Landlord's Work and provide the punch list to Landlord, which Landlord shall promptly correct.

3. TERM. The term of this Lease shall commence on the Commencement Date specified in Section 1, or on such earlier or later date as may be specified by notice delivered by Landlord to Tenant advising Tenant that the Premises are ready for possession and specifying the Commencement Date, which shall not be less than days (thirty (30) days if not filled in) following the date of such notice. TENANT MAY TAKE EARLY POSSESSION OF THE PREMISES FOLLOWING FULL EXECUTION OF THE LEASE. TENANT SHALL TRANSFER UTILITIES INTO ITS NAME UPON THE EARLIER OF POSSESSION OR ON THE COMMENCEMENT DATE.

a. Early Possession. If Landlord permits Tenant to possess or occupy the Premises prior to the Commencement Date specified in Section 1, then such early occupancy shall not advance the Commencement Date or the Termination Date set forth in Section 1, but otherwise all terms and conditions of this Lease shall nevertheless apply during the period of early occupancy before the Commencement Date.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 3 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

b. Delayed Possession. Landlord shall act diligently to make the Premises available to Tenant; provided, however, neither Landlord nor any agent or employee of Landlord shall be liable for any damage or loss due to Landlord's inability or failure to deliver possession of the Premises to Tenant as provided in this Lease. If possession is delayed, the Commencement Date set forth in Section 1 shall also be delayed. In addition, the Termination Date set forth in Section 1 shall be modified so that the length of the Lease term remains the same. If Landlord does not deliver possession of the Premises to Tenant within _________ days (sixty (60) days if not filled in) after the Commencement Date specified in Section 1, Tenant may elect to cancel this Lease by giving written notice to Landlord within ten (10) days after such time period ends. If Tenant gives such notice of cancellation, the Lease shall be cancelled, all prepaid rent and security deposits shall be refunded to Tenant, and neither Landlord nor Tenant shall have any further obligations to the other. The first "Lease year" shall commence on the Commencement Date and shall end on the date which is twelve (12) months from the end of the month in which the Commencement Date occurs. Each successive Lease year during the initial term and any extension terms shall be twelve (12) months, commencing on the first day following the end of the preceding Lease year. To the extent that the tenant improvements are not completed in time for the Tenant to occupy or take possession of the Premises on the Commencement Date due to the failure of Tenant to fulfill any of its obligations under this Lease, the Lease shall nevertheless commence on the Commencement Date set forth in Section 1.

4. RENT.

a. Payment of Rent. Tenant shall pay Landlord without notice, demand, deduction, or ffset, in lawful money of the United States, the monthly Base Rent stated in Section 1 in advance on or before the first day of each month during the Lease term beginning on (check one): ☐ the Commencement Date, or ☐ _________ (if no date specified, then on the Commencement Date), and shall also pay any other additional payments due to Landlord ("Additional Rent"), including Operating Costs (collectively the "Rent") when required under this Lease. Payments for any partial month at the beginning or end of the Lease shall be prorated. All payments due to Landlord under this Lease, including late fees and interest, shall also constitute Additional Rent, and upon failure of Tenant to pay any such costs, charges or expenses, Landlord shall have the same rights and remedies as otherwise provided in this Lease for the failure of Tenant to pay rent.

b. Triple Net Lease. This Lease is what is commonly called a "Net, Net, Net" or "triple-net" Lease, which means that, except as otherwise expressly provided herein, Landlord shall receive all Base Rent free and clear of any and all other impositions, taxes, liens, charges or expenses of any nature whatsoever in connection with the ownership and operation of the Premises. In addition to Base Rent, Tenant shall pay to the parties respectively entitled thereto, or satisfy directly, all Additional Rent and other impositions, insurance premiums, repair and maintenance charges, and any other charges, costs, obligations, liabilities, requirements, and expenses„ which arise with regard to the Premises or may be contemplated under any other provision of the Lease during its term, except for costs and expenses expressly made the obligation of Landlord in this Lease.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 4 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

c. Late Charges; Default Interest. If any sums payable by Tenant to Landlord under this Lease are not received within five (5) business days after their due date, Tenant shall pay Landlord an amount equal to the greater of $100 or five percent (5%) of the delinquent amount for the cost of collecting and handling such late payment in addition to the amount due and as Additional Rent. All delinquent sums payable by Tenant to Landlord and not paid within five (5) business days after their due date shall, at Landlord's option, bear interest at the rate of fifteen percent (15%) per annum, or the highest rate of interest allowable by law, whichever is less (the "Default Rate"). Interest on all delinquent amounts shall be calculated from the original due date to the date of payment.

d. Less Than Full Payment. Landlord's acceptance of less than the full amount of any payment due from Tenant shall not be deemed an accord and satisfaction or compromise of such payment unless Landlord specifically consents in writing to payment of such lesser sum as an accord and satisfaction or compromise of the amount which Landlord claims. Any portion that remains to be paid by Tenant shall be subject to the late charges and default interest provisions of this Section 4.

5. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deliver to Landlord the security deposit specified in Section 1 above. Landlord's obligations with respect to the security deposit are those of a debtor and not of a trustee, and Landlord may commingle the security deposit with its other funds. If Tenant breaches any covenant or condition of this Lease, including but not limited to the payment of Rent, Landlord may apply all or any part of the security deposit to the payment of any sum in default and any damage suffered by Landlord as a result of Tenant's breach. Tenant acknowledges, however, that the security deposit shall not be considered as a measure of Tenant's damages in case of default by Tenant, and any payment to Landlord from the security deposit shall not be construed as a payment of liquidated damages for Tenant's default. If Landlord applies the security deposit as contemplated by this Section, Tenant shall, within five (5) days after written demand therefore by Landlord, deposit with Landlord the amount so applied. If Tenant complies with all of the covenants and conditions of this Lease throughout the Lease term, the security deposit shall be repaid to Tenant without interest within thirty (30) days after the surrender of the Premises by Tenant in the condition required hereunder by Section 11 of this Lease.

6. USES. The Premises shall be used only for the Permitted Use specified in Section 1 above, and for no other business or purpose without the prior written consent of Landlord. No act shall be done on or around the Premises that is unlawful IN THE STATE OF WASHINGTON or that will increase the existing rate of insurance on the Premises, or cause the cancellation of any insurance on the Premises. Tenant shall not commit or allow to be committed any waste upon the Premises, or any public or private nuisance. Tenant shall not do or permit anything to be done on the Premises which will obstruct or interfere with the rights of other tenants or occupants of the Premises, or their employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees or to injure or annoy such persons.

7. COMPLIANCE WITH LAWS. Tenant shall not cause or permit the Premises to be used in any way which violates any WASHINGTON STATE law, ordinance, or governmental regulation or order. Landlord represents to Tenant that, as of the Commencement Date, to Landlord's knowledge, but without duty of investigation, and with the exception of any Tenant's Work, the Premises comply with all applicable laws, rules, regulations, or orders, including without limitation, the Americans With Disabilities Act, if applicable, and Landlord shall be responsible to promptly cure at its sole cost any noncompliance which existed on the Commencement Date. Tenant shall be responsible for complying with all laws applicable to the Premises as a result of the Permitted Use, and Tenant shall be responsible for making any changes or alterations as may be required by law, rule, regulation, or order for Tenant's Permitted Use at its sole cost and expense. Otherwise, if changes or alterations are required by rule, law, regulation, or order unrelated to the Permitted Use, Landlord shall make changes and alterations at its expense.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 5 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

8. UTILITIES. Landlord shall not be responsible for providing any utilities to the Premises and shall not be liable for any loss, injury or damage to person or property caused by or resulting from any variation, interruption, or failure of utilities due to any cause whatsoever, and rent shall not abate as a result thereof, except to the extent due to the intentional misconduct or gross negligence of Landlord. Tenant shall be responsible for determining whether available utilities and their capacities will meet Tenant's needs. Tenant shall install and connect, if necessary, and directly pay for all water, sewer, gas, janitorial, electricity, garbage removal, heat, telephone, and other utilities and services used by Tenant on the Premises during the term, whether or not such services are billed directly to Tenant. Tenant will also procure, or cause to be procured, without cost to Landlord, all necessary permits, licenses or other authorizations required for the lawful and proper installation, maintenance, replacement, and removal on or from the Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying all utilities or services to the Premises. Landlord, upon request of Tenant, and at the sole expense and liability of Tenant, shall join with Tenant in any reasonable applications required for obtaining or continuing such utilities or services.

9. TAXES. Tenant shall pay all Taxes (defined below) applicable to the Premises during the Lease term. All payments for Taxes shall be made at least ten (10) days prior to their due date. Tenant shall promptly furnish Landlord with satisfactory evidence that Taxes have been paid. If any Taxes paid by Tenant cover any period of time before or after the expiration of the term, Tenant's share of those Taxes paid will be prorated to cover only the period of time within the tax fiscal year during which this Lease was in effect, and Landlord shall promptly reimburse or credit Tenant to the extent required. If Tenant fails to timely pay any Taxes, Landlord may pay them, and Tenant shall repay such amount to Landlord upon demand. Landlord may also elect to pay all such Taxes directly to the appropriate taxing authority/ies and receive reimbursement thereof from Tenant within ten (10) days after invoice, either of the full amount paid or at Landlord's election in equal monthly installments.

The term "Taxes" shall mean: (i) any form of tax or assessment imposed on the Premises by any authority, including any city, county, state or federal government, or any improvement district, as against any legal or equitable interest of Landlord or Tenant in the Premises or in the real property of which the Premises are a part, or against rent paid for leasing the Premises; and (ii) any form of personal property tax or assessment imposed on any personal property, fixtures, furniture, tenant improvements, equipment, inventory, or other items, and all replacements, improvements, and additions to them, located on the Premises, whether owned by Landlord or Tenant. "Taxes" shall exclude any net income tax imposed on Landlord for income that Landlord receives under this Lease.

Tenant may, upon reasonable prior notice to Landlord, contest the amount or validity, in whole or in part, of any Taxes at its sole expense, only after paying such Taxes or posting such security as Landlord may reasonably require in order to protect the Premises against loss or forfeiture. Upon the termination of any such proceedings, Tenant shall pay the amount of such Taxes or part of such Taxes as finally determined, together with any costs, fees, interest penalties, or other related liabilities. Landlord shall reasonably cooperate with Tenant in contesting any Taxes, provided Landlord incurs no expense or liability in doing so.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 6 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

10. ALTERATIONS. Tenant may make alterations, additions or improvements to the Premises, including any Tenant Work, TO BE MATUALLY AGREED UPON BETWEEN LANDLORD AND TENANT WITHIN THIRTY (30) DAYS OF LEASE EXECUTION, identified on attached Exhibit C (the "Alterations"), only with the prior written consent of Landlord, which, with respect to Alterations not affecting the structural components of the Premises or utility systems therein, shall not be unreasonably withheld, conditioned, or delayed. Landlord shall have thirty (30) days in which to respond to Tenant's request for any Alterations so long as such request includes the name of Tenant's contractors and reasonably detailed plans and specifications therefore. The term "Alterations" shall not include the installation of shelves, movable partitions, Tenant's equipment, and trade fixtures that may be performed without damaging existing improvements or the structural integrity of the Premises and Landlord's consent shall not be required for Tenant's installation or removal of those items. Tenant shall perform all work at Tenant's expense and in compliance with all applicable laws and shall complete all Alterations in accordance with plans and specifications approved by Landlord, using contractors approved by Landlord. Tenant shall pay, when due, or furnish a bond for payment (as set forth in Section 18) all claims for labor or materials furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanics' or materialmens' liens against the Premises or any interest therein. Tenant shall remove all Alterations at the end of the Lease term unless Landlord conditioned its consent upon Tenant leaving a specified Alteration at the Premises, in which case Tenant shall not remove such Alteration, and it shall become Landlord's property. Tenant shall immediately repair any damage to the Premises caused by removal of Alterations.

11. REPAIRS AND MAINTENANCE; SURRENDER. Tenant shall, at its sole expense, maintain the entire Premises including without limitation the roof surface and normal repairs and maintenance to all heating, ventilation, and air conditioning ("HVAC") equipment at the Premises, in good condition and promptly make all repairs and replacements, whether structural or non-structural, necessary to keep the Premises in safe operating condition, including all utilities and other systems serving the Premises, but excluding the roof structure, subfloor, foundation, exterior walls, and capital repairs and replacements to the HVAC system (collectively, "Landlord's Repair Items"), which Landlord shall maintain in good condition and repair at Landlord's expense, provided that Tenant shall not damage any Landlord's Repair Items and shall promptly repair any damage or injury done thereto caused by Tenant or its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees . Notwithstanding anything in this Section to the contrary, Tenant shall not be responsible for any repairs to the Premises made necessary by the negligence or willful misconduct of Landlord or its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees therein. If Tenant fails to perform Tenant's obligations under this Section, Landlord may at Landlord's option enter upon the Premises after ten (10) days' prior notice to Tenant and put the same in good order, condition and repair and the cost thereof together with interest thereon at the default rate set forth in Section 4 shall be due and payable as Additional Rent to Landlord together with Tenant's next installment of Base Rent. Upon expiration of the Lease term, whether by lapse of time or otherwise, Tenant shall promptly and peacefully surrender the Premises, together with all keys, to Landlord in as good condition as when received by Tenant from Landlord or as thereafter improved, reasonable wear and tear and insured casualty excepted.

12. ACCESS AND RIGHT OF ENTRY. After twenty-four (24) hours' notice from Landlord (except in cases of emergency, when no notice shall be required), Tenant shall permit Landlord and its agents, employees and contractors to enter the Premises at all reasonable times to make repairs, inspections, alterations or improvements, provided that Landlord shall use reasonable efforts to minimize interference with Tenant's use and enjoyment of the Premises. This Section shall not impose any repair or other obligation upon Landlord not expressly stated elsewhere in this Lease. After reasonable notice to Tenant, Landlord shall have the right to enter the Premises for the purpose of (a) showing the Premises to prospective purchasers or lenders at any time, and to prospective tenants within one hundred eighty (180) days prior to the expiration or sooner termination of the Lease term; and, (b) for posting "for lease" signs within one hundred eighty (180) days prior to the expiration or sooner termination of the Lease term.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 7 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

13. SIGNAGE. Tenant shall obtain Landlord's written consent as to size, location, materials, method of attachment, and appearance, before installing any signs upon the Premises. Tenant shall install any approved signage at Tenant's sole expense and in compliance with all applicable laws. Tenant shall not damage or deface the Premises in installing or removing signage and shall repair any injury or damage to the Premises caused by such installation or removal.

14. DESTRUCTION OR CONDEMNATION.

a. Damage and Repair. If the Premises are partially damaged but not rendered untenantable, by fire or other insured casualty, then Landlord shall diligently restore the Premises to the extent required below and this Lease shall not terminate. The Premises shall not be deemed untenantable if twenty-five percent (25%) or less of the Premises are damaged. Landlord shall have no obligation to restore the Premises if insurance proceeds are not available to pay the entire cost of such restoration. If insurance proceeds are available to Landlord but are not sufficient to pay the entire cost of restoring the Premises, or if Landlord's lender shall not permit all or any part of the insurance proceeds to be applied toward restoration, then Landlord may elect to terminate this Lease and keep the insurance proceeds, by notifying Tenant within sixty (60) days of the date of such casualty.

If the Premises are entirely destroyed, or partially damaged and rendered untenantable, by fire or other casualty, Landlord may, at its option: (a) terminate this Lease as provided herein, or (b) restore the Premises to their previous condition to the extent required below; provided, however, if such casualty event occurs during the last six (6) months of the Lease term (after considering any option to extend the term timely exercised by Tenant) then either Tenant or Landlord may elect to terminate the Lease. If, within sixty (60) days after receipt by Landlord from Tenant of written notice that Tenant deems the Premises untenantable, Landlord fails to notify Tenant of its election to restore the Premises, or if Landlord is unable to restore the Premises within six (6) months of the date of the casualty event, then Tenant may elect to terminate the Lease upon twenty (20) days' written notice to Landlord unless Landlord, within such twenty (20) day period, notifies Tenant that it will in fact restore the Premises or actually completes such restoration work to the extent required below, as applicable.

If Landlord restores the Premises under this Section 14, Landlord shall proceed with reasonable diligence to complete the work, and the base monthly rent shall be abated in the same proportion as the untenantable portion of the Premises bears to the whole Premises, provided that there shall be a rent abatement only if the damage or destruction of the Premises did not result from, or was not contributed to directly or indirectly by the act, fault or neglect of Tenant, or Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees. No damages, compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance directly, incidentally or consequentially arising from any repair or restoration of any portion of the Premises. Landlord shall have no obligation to carry insurance of any kind for the protection of Tenant or any alterations or improvements paid for by Tenant; any Tenant Improvements identified in Exhibit B (regardless of who may have completed them); Tenant's furniture; or on any fixtures, equipment, improvements or appurtenances of Tenant under this Lease, and Landlord's restoration obligations hereunder shall not include any obligation to repair any damage thereto or replace the same.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 8 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

b. Condemnation. If the Premises are made untenantable by eminent domain, or conveyed under a threat of condemnation, this Lease shall automatically terminate as of the earlier of the date title vests in the condemning authority or the condemning authority first has possession of the Premises and all Rents and other payments shall be paid to that date. If the condemning authority takes a portion of the Premises that does not render the Premises untenantable, then this Lease shall continue in full force and effect and the base monthly rent shall be equitably reduced based on the proportion by which the floor area of any structures is reduced The reduction in Rent shall be effective on the earlier of the date the condemning authority first has possession of such portion or title vests in the condemning authority. Landlord shall be entitled to the entire award from the condemning authority attributable to the value of the Premises and Tenant shall make no claim for the value of its leasehold. Tenant shall be permitted to make a separate claim against the condemning authority for moving expenses, provided that in no event shall Tenant's claim reduce Landlord's award.

15. INSURANCE.

a. Tenant's Liability Insurance. During the Lease term, Tenant shall pay for and maintain commercial general liability insurance with broad form property damage and contractual liability endorsements. This policy shall name Landlord, its property manager (if any), and other parties designated by Landlord as additional insureds using an endorsement form acceptable to Landlord, and shall insure Tenant's activities and those of Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees with respect to the Premises against loss, damage or liability for personal injury or bodily injury (including death) or loss or damage to property with not less than $6,000,000 PER OCCURRENCE, $7,000,000 AGGREGATE, and a deductible of not more than $10,000. THIS AMOUNT CAN BE REACHED BY USING “UMBRELLA/EXCESS” LIABILITY IF NEEDED. TENANT SHALL ALSO CARRY COMMERCIAL AUTOMOBILE LIABILITY INSURANCE IN THE AMOUNT OF $1,000,000 FOR OWNED/NON OWNED/HIRED AUTOS. WORKERS COMPENSATION/EMPLOYERS LIABILITY SHALL ALSO BE EVIDENCED ON A CERTIFICATE OF LIABILITY INSURANCE. ADDITIONAL INSURED FORM(S) SHOULD BE INCLUDED WITH THE CERTIFICATE OF INSURANCE. Tenant's insurance will be primary and noncontributory with any liability insurance carried by Landlord. Landlord may also require Tenant to obtain and maintain business income coverage for at least six (6) months, business auto liability coverage, and, if applicable to Tenant's Permitted Use, liquor liability insurance and/or warehouseman's coverage.

b. Tenant's Property Insurance. During the Lease term, Tenant shall pay for and maintain special form clauses of loss coverage property insurance (with coverage for earthquake if required by Landlord's lender and, if the Premises are situated in a flood plain, flood damage) for all of Tenant's personal property, fixtures and equipment in the amount of their full replacement value, with a deductible of not more than $10,000.

c. Miscellaneous. Tenant's insurance required under this Section shall be with companies rated A-NII or better in Best's Insurance Guide, and which are admitted in the state in which the Premises are located. No insurance policy shall be cancelled or reduced in coverage and each such policy shall provide that it is not subject to cancellation or a reduction in coverage except after thirty (30) days prior written notice to Landlord. Tenant shall deliver to Landlord upon commencement of the Lease and from time to time thereafter, copies of the insurance policies or evidence of insurance and copies of endorsements required by this Section. In no event shall the limits of such policies be considered as limiting the liability of Tenant under this Lease. If Tenant fails to acquire or maintain any insurance or provide any policy or evidence of insurance required by this Section, and such failure continues for three (3) days after notice from Landlord, Landlord may, but shall not be required to, obtain such insurance for Landlord's benefit and Tenant shall reimburse Landlord for the costs of such insurance upon demand. Such amounts shall be Additional Rent payable by Tenant hereunder and in the event of non-payment thereof, Landlord shall have the same rights and remedies with respect to such non-payment as it has with respect to any other non-payment of rent hereunder.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 9 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

d. Waiver of Subrogation. Landlord and Tenant hereby release each other and any other tenant, their agents or employees, from responsibility for, and waive their entire claim of recovery for any loss or damage arising from any cause covered by property insurance required to be carried or otherwise carried by each of them. Each party shall provide notice to the property insurance carrier or carriers of this mutual waiver of subrogation, and shall cause its respective property insurance carriers to waive all rights of subrogation against the other. This waiver shall not apply to the extent of the deductible amounts to any such property policies or to the extent of liabilities exceeding the limits of such policies.

16. INDEMNIFICATION.

a. Indemnification by Tenant. Tenant shall defend, indemnify, and hold Landlord and its property manager, if any, harmless against all liabilities, damages, costs, and expenses, including attorneys' fees, for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or omission of Tenant or Tenant's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees on or around the Premises, or arising from any breach of this Lease by Tenant. Tenant shall use legal counsel reasonably acceptable to Landlord in defense of any action within Tenant's defense obligation.

b. Indemnification by Landlord. Landlord shall defend, indemnify and hold Tenant harmless against all liabilities, damages, costs, and expenses, including attorneys' fees, for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or omission of Landlord or Landlord's employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees on or around the Premises, or arising from any breach of this Lease by Landlord. Landlord shall use legal counsel reasonably acceptable to Tenant in defense of any action within Landlord's defense obligation.

c. Waiver of Immunity. Landlord and Tenant each specifically and expressly waive any immunity that each may be granted under the Washington State Industrial Insurance Act, Title 51 RCW. Neither party's indemnity obligations under this Lease shall be limited by any limitation on the amount or type of damages, compensation, or benefits payable to or for any third party under the Worker Compensation Acts, Disability Benefit Acts or other employee benefit acts.

d. Exemption of Landlord from Liability. Except to the extent of claims arising out of Landlord's gross negligence or intentional misconduct, Landlord shall not be liable for injury to Tenant's business or assets or any loss of income therefrom or for damage to any property of Tenant or of its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees, or any other person in or about the Premises.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 10 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

e. Survival. The provisions of this Section 16 shall survive expiration or termination of this Lease.

17. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet, mortgage, encumber or otherwise transfer any interest in this Lease (collectively referred to as a "Transfer") or any part of the Premises, without first obtaining Landlord's written consent which shall not be unreasonably withheld, conditioned, or delayed. No Transfer shall relieve Tenant of any liability under this Lease notwithstanding Landlord's consent to such Transfer. Consent to any Transfer shall not operate as a waiver of the necessity for Landlord's consent to any subsequent Transfer. In connection with each request for consent to a Transfer, Tenant shall pay the reasonable cost of processing same, including attorneys' fees, upon demand of Landlord, up to a maximum of $1,250. Tenant may sublet to Deigo Pellicer Inc. without landlord approval.

If Tenant is a partnership, limited liability company, corporation, or other entity, any transfer of this Lease by merger, consolidation, redemption or liquidation, or any change in the ownership of, or power to vote, which singularly or collectively represents a majority of the beneficial interest in Tenant, shall constitute a Transfer under this Section.

As a condition to Landlord's approval, if given, any potential assignee or sublessee otherwise approved by Landlord shall assume all obligations of Tenant under this Lease and shall be jointly and severally liable with Tenant and any guarantor, if required, for the payment of Rent and performance of all terms of this Lease. In connection with any Transfer, Tenant shall provide Landlord with copies of all assignments, subleases and assumption agreement or documents.

18. LIENS. Tenant is not authorized to subject the Landlord's assets to any liens or claims of lien. Tenant shall keep the Premises free from any liens created by or through Tenant. Tenant shall indemnify and hold Landlord harmless from liability for any such liens including, without limitation, liens arising from any Alterations. If a lien is filed against the Premises by any person claiming by, through or under Tenant, Tenant shall, within 10 days after Landlord's demand, at Tenant's expense, either remove the lien or furnish to Landlord a bond in form and amount and issued by a surety satisfactory to Landlord, indemnifying Landlord and the Premises against all liabilities, costs and expenses, including attorneys' fees, which Landlord could reasonably incur as a result of such lien.

19. DEFAULT. The following occurrences shall each constitute a default by Tenant (an "Event of Default):

a. Failure To Pay. Failure by Tenant to pay any sum, including Rent, due under this Lease following five (5) days' notice from Landlord of the failure to pay.

b. Vacation/Abandonment. Vacation by Tenant of the Premises (defined as an absence for at least fifteen (15) consecutive days without prior notice to Landlord), or abandonment of the Premises (defined as an absence of five (5) days or more while Tenant is in breach of some other term of this Lease). Tenant's vacation or abandonment of the Premises shall not be subject to any notice or right to cure.

c. Insolvency. Tenant's insolvency or bankruptcy (whether voluntary or involuntary), or appointment of a receiver, assignee or other liquidating officer for Tenant's business; provided, however, that in the event of any involuntary bankruptcy or other insolvency proceeding, the existence of such proceeding shall constitute an Event of Default only if such proceeding is not dismissed or vacated within sixty (60) days after its institution or commencement.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 11 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

d. Levy or Execution. The taking of Tenant's interest in this Lease or the Premises, or any part thereof, by execution or other process of law directed against Tenant, or attachment of Tenant's interest in this Lease by any creditor of Tenant, if such attachment is not discharged within fifteen (15) days after being levied.

e. Other Non-Monetary Defaults. The breach by Tenant of any agreement, term or covenant of this Lease other than one requiring the payment of money and not otherwise enumerated in this Section or elsewhere in this Lease, which breach continues for a period of thirty (30) days after notice by Landlord to Tenant of the breach.

f. Failure to Take Possession. Failure by Tenant to take possession of the Premises on the Commencement Date or failure by Tenant to commence any Tenant's Work in a timely fashion.

Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event less than thirty (30) days after notice by Tenant to Landlord. If Landlord fails to cure any such default within the allotted time, Tenant's sole remedy shall be to seek actual money damages (but not consequential or punitive damages) for loss arising from Landlord's failure to discharge its obligations under this Lease. Nothing herein contained shall relieve Landlord from its duty to perform of any of its obligations to the standard prescribed in this Lease.

Any notice periods granted herein shall be deemed to run concurrently with and not in addition to any default notice periods required by law.

20. REMEDIES. Landlord shall have the following remedies upon an Event of Default. Landlord's rights and remedies under this Lease shall be cumulative, and none shall exclude any other right or remedy allowed by law.

a. Termination of Lease. Landlord may terminate Tenant's interest under the Lease, but no act by Landlord other than notice of termination from Landlord to Tenant shall terminate this Lease. The Lease shall terminate on the date specified in the notice of termination. Upon termination of this Lease, Tenant will remain liable to Landlord for damages in an amount equal to the Rent and other sums that would have been owing by Tenant under this Lease for the balance of the Lease term, less the net proceeds, if any, of any reletting of the Premises by Landlord subsequent to the termination, after deducting all of Landlord's Reletting Expenses (as defined below). Landlord shall be entitled to either collect damages from Tenant monthly on the days on which rent or other amounts would have been payable under the Lease, or alternatively, Landlord may accelerate Tenant's obligations under the Lease and recover from Tenant: (i) unpaid rent which had been earned at the time of termination; (ii) the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of rent loss that Tenant proves could reasonably have been avoided; (iii) the amount by which the unpaid rent for the balance of the term of the Lease after the time of award exceeds the amount of rent loss that Tenant proves could reasonably be avoided (discounting such amount by the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus 1%); and (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under the Lease, or which in the ordinary course would be likely to result from the Event of Default, including without limitation Reletting Expenses described in Section 20(b) below.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 12 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

b. Re-Entry and Reletting. Landlord may continue this Lease in full force and effect, and without demand or notice, re-enter and take possession of the Premises or any part thereof, expel the Tenant from the Premises and anyone claiming through or under the Tenant, and remove the personal property of either. Landlord may relet the Premises, or any part of them, in Landlord's or Tenant's name for the account of Tenant, for such period of time and at such other terms and conditions as Landlord, in its discretion, may determine. Landlord may collect and receive the rents for the Premises. To the fullest extent permitted by law, the proceeds of any reletting shall be applied: first, to pay Landlord all Reletting Expenses (defined below); second, to pay any indebtedness of Tenant to Landlord other than rent; third, to the rent due and unpaid hereunder; and fourth, the residue, if any, shall be held by Landlord and applied in payment of other or future obligations of Tenant to Landlord as the same may become due and payable, and Tenant shall not be entitled to receive any portion of such revenue. Re-entry or taking possession of the Premises by Landlord under this Section shall not be construed as an election on Landlord's part to terminate this Lease, unless a notice of termination is given to Tenant. Landlord reserves the right following any re-entry or reletting, or both, under this Section to exercise its right to terminate the Lease. Tenant will pay Landlord the Rent and other sums which would be payable under this Lease if repossession had not occurred, less the net proceeds, if any, after reletting the Premises and after deducting Landlord's Reletting Expenses. "Reletting Expenses" is defined to include all expenses incurred by Landlord in connection with reletting the Premises, including without limitation, all repossession costs, brokerage commissions and costs for securing new tenants, attorneys' fees, remodeling and repair costs, costs for removing persons or property, costs for storing Tenant's property and equipment, and costs of tenant improvements and rent concessions granted by Landlord to any new Tenant, prorated over the life of the new lease.

c. Waiver of Redemption Rights. Tenant, for itself, and on behalf of any and all persons claiming through or under Tenant, including creditors of all kinds, hereby waives and surrenders all rights and privileges which they may have under any present or future law, to redeem the Premises or to have a continuance of this Lease for the Lease term, or any extension thereof.

d. Nonpayment of Additional Rent. All costs which Tenant is obligated to pay to Landlord pursuant to this Lease shall in the event of nonpayment be treated as if they were payments of Rent, and Landlord shall have the same rights it has with respect to nonpayment of Rent.

e. Failure to Remove Property. If Tenant fails to remove any of its property from the Premises at Landlord's request following an uncured Event of Default, Landlord may, at its option, remove and store the property at Tenant's expense and risk. If Tenant does not pay the storage cost within five (5) days of Landlord's request, Landlord may, at its option, have any or all of such property sold at public or private sale (and Landlord may become a purchaser at such sale), in such manner as Landlord deems proper, without notice to Tenant. Landlord shall apply the proceeds of such sale: (i) to the expense of such sale, including reasonable attorneys' fees actually incurred; (ii) to the payment of the costs or charges for storing such property; (iii) to the payment of any other sums of money which may then be or thereafter become due Landlord from Tenant under any of the terms hereof; and (iv) the balance, if any, to Tenant. Nothing in this Section shall limit Landlord's right to sell Tenant's personal property as permitted by law or to foreclose Landlord's lien for unpaid rent.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 13 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

21. MORTGAGE SUBORDINATION AND ATTORNMENT. This Lease shall automatically be subordinate to any mortgage or deed of trust created by Landlord which is now existing or hereafter placed upon the Premises including any advances, interest, modifications, renewals, replacements or extensions ("Landlord's Mortgage"). Tenant shag attorn to the holder of any Landlord's Mortgage or any party acquiring the Premises at any sale or other proceeding under any Landlord's Mortgage provided the acquiring party assumes the obligations of Landlord under this Lease. Tenant shall promptly and in no event later than fifteen (15) days after request execute, acknowledge and deliver documents which the holder of any Landlord's Mortgage may reasonably require as further evidence of this subordination and attornment. Notwithstanding the foregoing, Tenant's obligations under this Section to subordinate in the future are conditioned on the holder of each Landlord's Mortgage and each party acquiring the Premises at any sale or other proceeding under any such Landlord's Mortgage not disturbing Tenant's occupancy and other rights under this Lease, so long as no uncured Event of Default by Tenant exists.

22. NON-WAIVER. Landlord's waiver of any breach of any provision contained in this Lease shall not be deemed to be a waiver of the same provision for subsequent acts of Tenant. The acceptance by Landlord of Rent or other amounts due by Tenant hereunder shall not be deemed to be a waiver of any previous breach by Tenant.

23. HOLDOVER. If Tenant shall, without the written consent of Landlord, remain in possession of the Premises and fail to return them to Landlord after the expiration or termination of the term, the tenancy shall be a holdover tenancy and shall be on a month-to-month basis, which may be terminated according to Washington law. During such tenancy, Tenant agrees to pay to Landlord 150% of the rate of rental last payable under this Lease, unless a different rate is agreed upon by Landlord. All other terms of the Lease shall remain in effect. Tenant acknowledges and agrees that this Section does not grant any right to Tenant to holdover, and that Tenant may also be liable to Landlord for any and all damages or expenses which Landlord may have to incur as a result of Tenant's holdover.

24. NOTICES. All notices under this Lease shall be in writing and effective (i) when delivered in person or via overnight courier to the other party, (ii) three (3) days after being sent by registered or certified mail to the other party at the address set forth in Section 1; or (iii) upon confirmed transmission by facsimile to the other party at the facsimile numbers set forth in Section 1. The addresses for notices and payment of rent set forth in Section 1 may be modified by either party only by written notice delivered in conformance with this Section.

25. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord engage the services of an attorney to collect monies due or to bring any action for any relief against the other, declaratory or otherwise, arising out of this Lease, including any suit by Landlord for the recovery of Rent or other payments, or possession of the Premises, the losing party shall pay the prevailing party a reasonable sum for attorneys' fees in such action, whether in mediation or arbitration, at trial, on appeal, and in any bankruptcy proceeding.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 14 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

26. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written request of Landlord, execute, acknowledge and deliver to Landlord or its designee a written statement specifying the following, subject to any modifications necessary to make such statements true and complete: (i) the total rentable square footage of the Premises; (ii) the date the Lease term commenced and the date it expires; (iii) the amount of minimum monthly Rent and the date to which such Rent has been paid; (iv) that this Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way; (v) that this Lease represents the entire agreement between the parties; (vi) that all obligations under this Lease to be performed by either party have been satisfied; (vii) that there are no existing claims, defenses or offsets which the Tenant has against the enforcement of this Lease by Landlord; (viii) the amount of Rent, if any, that Tenant paid in advance; (ix) the amount of security that Tenant deposited with Landlord; (x) if Tenant has sublet all or a portion of the Premises or assigned its interest in the Lease and to whom; (xi) if Tenant has any option to extend the Lease or option to purchase the Premises; and (xii) such other factual matters concerning the Lease or the Premises as Landlord may reasonably request. Tenant acknowledges and agrees that any statement delivered pursuant to this Section may be relied upon by a prospective purchaser of Landlord's interest or assignee of any mortgage or new mortgagee of Landlord's interest in the Premises. If Tenant shall fail to respond within ten (10) days to Landlord's request for the statement required by this Section, Landlord may provide the statement and Tenant shall be deemed to have admitted the accuracy of the information provided by Landlord.

27. TRANSFER OF LANDLORD'S INTEREST. This Lease shall be assignable by Landlord without the consent of Tenant. In the event of any transfer or transfers of Landlord's interest in the Premises, other than a transfer for collateral purposes only, upon the assumption of this Lease by the transferee, Landlord shall be automatically relieved of obligations and liabilities accruing from and after the date of such transfer, including any liability for any retained security deposit or prepaid rent, for which the transferee shall be liable, and Tenant shall attorn to the transferee.

28. LANDLORD'S LIABILITY. Anything in this Lease to the contrary notwithstanding, covenants, undertakings and agreements herein made on the part of Landlord are made and intended not as personal covenants, undertakings and agreements for the purpose of binding Landlord personally or the assets of Landlord but are made and intended for the purpose of binding only the Landlord's interest in the Premises, as the same may from time to time be encumbered. In no event shall Landlord or its partners, shareholders, or members, as the case may be, ever be personally liable hereunder.

29. RIGHT TO PERFORM. If Tenant shall fail to timely pay any sum or perform any other act on its part to be performed hereunder, Landlord may make any such payment or perform any such other act on Tenant's behalf. Tenant shall, within ten (10) days of demand, reimburse Landlord for its expenses incurred in making such payment or performance. Landlord shall (in addition to any other right or remedy of Landlord provided by law) have the same rights and remedies in the event of the nonpayment of sums due under this Section as in the case of default by Tenant in the payment of Rent.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 15 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

30. HAZARDOUS MATERIAL. As used herein, the term "Hazardous Material" means any hazardous, dangerous, toxic or harmful substance, material or waste including biomedical waste which is or becomes regulated by any local governmental authority, the State of Washington or the United States Government, due to its potential harm to the health, safety or welfare of humans or the environment. Landlord represents and warrants to Tenant that, to Landlord's knowledge without duty of investigation, there is no Hazardous Material on, in, or under the Premises as of the Commencement Date except as may otherwise have been disclosed to Tenant in writing before the execution of this Lease. If there is any Hazardous Material on, in, or under the Premises as of the Commencement Date which has been or thereafter becomes unlawfully released through no fault of Tenant, then Landlord shall indemnify, defend and hold Tenant harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses including without limitation sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees, incurred or suffered by Tenant either during or after the Lease term as the result of such contamination. Tenant shall not cause or permit any Hazardous Material to be brought upon, kept, or used in or about, or disposed of on the Premises by Tenant, its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees, except with Landlord's prior consent and then only upon strict compliance with all applicable federal, state and local laws, regulations, codes and ordinances. If Tenant breaches the obligations stated in the preceding sentence, then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses including, without limitation, diminution in the value of the Premises; damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises, or elsewhere; damages arising from any adverse impact on marketing of space at the Premises; and sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees incurred or suffered by Landlord either during or after the Lease term. These indemnifications by Landlord and Tenant include, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work, whether or not required by any federal, state or local governmental agency or political subdivision, because of Hazardous Material present in the Premises, or in soil or ground water on or under the Premises. Tenant shall immediately notify Landlord of any inquiry, investigation or notice that Tenant may receive from any third party regarding the actual or suspected presence of Hazardous Material on the Premises.

Without limiting the foregoing, if the presence of any Hazardous Material brought upon, kept or used in or about the Premises by Tenant, its employees, officers, agents, servants, contractors, customers, clients, visitors, guests, or other licensees or invitees, results in any unlawful release of any Hazardous Materials on the Premises or any other property, Tenant shall promptly take all actions, at its sole expense, as are necessary to return the Premises or any other property to the condition existing prior to the release of any such Hazardous Material; provided that Landlord's approval of such actions shall first be obtained, which approval may be withheld at Landlord's sole discretion. The provisions of this Section shall survive expiration or termination of this Lease.

31. QUIET ENJOYMENT. So long as Tenant pays the Rent and performs all of its obligations in this Lease, Tenant's possession of the Premises will not be disturbed by Landlord or anyone claiming by, through or under Landlord.

32. MERGER. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger and shall, at the option of Landlord, terminate all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

33. GENERAL.

a. Heirs and Assigns. This Lease shall apply to and be binding upon Landlord and Tenant and their respective heirs, executors, administrators, successors and assigns.

b. Brokers' Fees. Tenant represents and warrants to Landlord that except for Tenant's Broker, if any, described or disclosed in Section 35 of this Lease, it has not engaged any broker, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Lease and shall indemnify and hold harmless Landlord against any loss, cost, liability or expense incurred by Landlord as a result of any claim asserted by any such broker, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Tenant. Landlord represents and warrants to Tenant that except for Landlord's Broker, if any, described and disclosed in Section 35 of this Lease, it has not engaged any broker, finder or other person who would be entitled to any commission or fees for the negotiation, execution or delivery of this Lease and shall indemnify and hold harmless Tenant against any loss, cost, liability or expense incurred by Tenant as a result of any claim asserted by any such broker, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Landlord.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 16 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

c. Entire Agreement. This Lease contains all of the covenants and agreements between Landlord and Tenant relating to the Premises. No prior or contemporaneous agreements or understandings pertaining to the Lease shall be valid or of any force or effect and the covenants and agreements of this Lease shall not be altered, modified or amended to except in writing signed by Landlord and Tenant.

d. Severability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision of this Lease.

e. Force Majeure. Time periods for either party's performance under any provisions of this Lease (excluding payment of Rent) shall be extended for periods of time during which the party's performance is prevented due to circumstances beyond such party's control, including without limitation, fires, floods, earthquakes, lockouts, strikes, embargoes, governmental regulations, acts of God, public enemy, war or other strife.

f. Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Washington.

g. Memorandum of Lease. Neither this Lease nor any memorandum or "short form" thereof shall be recorded without Landlord's prior consent.

h. Submission of Lease Form Not an Offer. One party's submission of this Lease to the other for review shall not constitute an offer to lease the Premises. This Lease shall not become effective and binding upon Landlord and Tenant until it has been fully signed by both of them.

i. No Light, Air or View Easement. Tenant has not been granted an easement or other right for light, air or view to or from the Premises. Any diminution or shutting off of light, air or view by any structure which may be erected on or adjacent to the Premises shall in no way effect this Lease or the obligations of Tenant hereunder or impose any liability on Landlord.

j. Authority of Parties. Each party signing this Lease represents and warrants to the other that it has the authority to enter into this Lease, that the execution and delivery of this Lease has been duly authorized, and that upon such execution and delivery, this Lease shall be binding upon and enforceable against the party on signing.

k. Time. "Day" as used herein means a calendar day and "business day" means any day on which commercial banks are generally open for business in the state where the Premises are situated. Any period of time which would otherwise end on a non-business day shall be extended to the next following business day. Time is of the essence of this Lease.

L. LANDLORD'S OPTION To TERMINATE. SHOULD ANY GOVERNMENTAL AGENCY REQUEST TENANT TO SEIZE OPERATIONS, CLOSE BUSINESS, AND/OR VACATE, TENANT SHALL VACATE WITHIN THIRTY (30) DAYS WRITTEN NOTICE FROM SUCH GOVERNMENTAL AGENCY AND/OR LANDLORD. UPON TERMINATION, TENANT SHALL BE RESPONSIBLE FOR PAYMENT TO LANDLORD OF ANY UNAMORTIZED REAL ESTATE COMMISSIONS, FORFEIT SECURITY DEPOSIT AND LAST MONTHS RENT, AND RETURN THE PREMISES TO ITS ORIGINAL CONDITION AT LANDLORD'S DISCRETION.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 17 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

IN ADDITION, TENANT GRANTS TO LANDLORD THE RIGHT TO TERMINATE THIS LEASE AFTER SEPTEMBER 30, 2018 ON THE FOLLOWING TERMS AND CONDITIONS:

(A) LANDLORD'S RIGHT TO TERMINATE THIS LEASE SHALL BE CONDITIONED UPON EITHER: (I) LANDLORD DETERMINING IN ITS SOLE DISCRETION THAT SUCH TERMINATION IS REQUIRED FOR THE REDEVELOPMENT, MODIFICATION, OR RECONSTRUCTION OF THE PREMISES; OR LANDLORD DETERMINING IN ITS SOLE DISCRETION THAT SUCH TERMINATION IS REQUIRED BY THE SALE OF THE PREMISES.

(B) LANDLORD MAY EXERCISE ITS RIGHT TO TERMINATE THIS LEASE BY PROVIDING TENANT WITH WRITTEN NOTICE OF TERMINATION, WHICH NOTICE SHALL SET FORTH THE DATE THE LEASE WILL TERMINATE. IN NO EVENT SHALL THE DATE OF TERMINATION OCCUR ANY SOONER THAN TWELVE (12) MONTHS AFTER LANDLORD'S ISSUANCE OF THE NOTICE OF TERMINATION.

(C) ON OR BEFORE THE TERMINATION DATE SET FORTH IN THE NOTICE, TENANT WILL SURRENDER POSSESSION OF THE PREMISES TO LANDLORD IN ACCORDANCE WITH THE PROVISION OF THIS LEASE, AS IF THE TERMINATION DATE WERE THE EXPIRATION DATE OF THIS LEASE AND UPON TERMINATION, LANDLORD AND TENANT WILL BE RELIEVED OF THEIR OBLIGATIONS UNDER THIS LEASE, EXCEPT FOR THOSE ACCRUING BEFORE THE TERMINATION DATE.

(D) LANDLORD'S RIGHT TO TERMINATE AS PROVIDED IN THIS SECTION IS MATERIAL CONSIDERATION FOR LANDLORD ENTERING INTO THIS LEASE AND LANDLORD IS RELYING ON THIS RIGHT OF TERMINATION IN EXECUTING AND DELIVERING THIS LEASE. BUT FOR THE RIGHT OF TERMINATION GRANTED HEREIN, LANDLORD WOULD NOT ENTER INTO THIS LEASE.

M. TENANT'S OPTION To TERMINATE. IF THERE IS A CHANGE IN THE EXISTING LAWS GOVERNING THE LEGALITY OF TENANT'S BUSINESS, OR IN THE ENFORCEMENT OF EXISTING LAWS, WHICH MAKE IT IMPOSSIBLE TO CONTINUE OPERATING UNDER THE STATED USE, OR A SIMILAR USE ACCEPTABLE TO TENANT, TENANT SHALL BE ALLOWED TO TERMINATE THE REMAINDER OF THIS LEASE WITHIN SIXTY (60) DAYS WRITTEN NOTICE TO LANDLORD. UPON TERMINATION, TENANT SHALL BE RESPONSIBLE FOR PAYMENT TO LANDLORD OF ANY UNAMORTIZED REAL ESTATE COMMISSIONS, FORFEIT SECURITY DEPOSIT AND LAST MONTHS RENT, AND RETURN THE PREMISES TO ITS ORIGINAL CONDITION AT LANDLORD'S DISCRETION. TENANT MAY EXERCISE OPTION TO TERMINATE, IN ITS SOLE DISCRETION, IN THE EVENT DIEGO PELLICER INC IS NOT GRANTED A MARIJUANA RETAIL LICENSE BY WASHINGTON LIQUOR CONTROL BOARD.

N. TENANTS RIGHT OF FIRST REFUSAL To PURCHASE PROPERTY: DURING THE LEASE TERM;
TENANT SHALL HAVE A ONE TIME RIGHT OF FIRST REFUSAL TO PURCHASE THE PROPERTY FOR THE SAME PRICE AND IN ACCORDANCE WITH THE SAME TERMS AND CONDITIONS AS MAY BE TENDERED TO LANDLORD IN A BONA FIDE OFFER TO PURCHASE BY A PROSPECTIVE PURCHASER. TENANT SHALL HAVE TEN (10) DAYS FOLLOWING RECEIPT OF WRITTEN NOTICE FROM LANDLORD INDICATING LANDLORD'S INTENT TO ACCEPT THE SUBJECT OFFER, TOGETHER WITH A COPY OF THE PROPOSED PURCHASE AND SALE AGREEMENT, IN WHICH TO NOTIFY LANDLORD IN WRITING OF TENANT'S INTENT TO PURCHASE THE PROPERTY FOR THE SAME PURCHASE PRICE AND ON THE SAME TERMS AND CONDITIONS AS SET FORTH IN LANDLORD'S WRITTEN NOTICE. IF TENANT FAILS TO NOTIFY LANDLORD IN WRITING OF TENANT'S ELECTION TO PURCHASE THE PROPERTY, TENANT'S RIGHT OF FIRST REFUSAL SHALL BE NULL AND VOID, AND LANDLORD IRREVOCABLY MAY THEN SELL THE PROPERTY TO THE THIRD PARTY.

TENANT UNDERSTANDS THAT LANDLORD CONSISTS OF TWO (2) INDIVIDUALS. SHOULD ONE (1) OF THE INDIVIDUALS WANT TO BUY THE OTHER INDIVIDUALS SHARE OF THE PROPERTY, TENANTS RIGHT OF FIRST REFUSAL TO PURCHASE PROPERTY SHALL NOT INHIBIT THE INDIVIDUALS RIGHT TO PURCHASE THE OTHER INDIVIDUALS SHARE OF THE PROPERTY.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 18 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

34. EXHIBITS AND RIDERS. The following exhibits and riders are made a part of this Lease, and the terms thereof shall control over any inconsistent provision in the sections of this Lease:

Exhibit A: Legal Description of the Property

Exhibit B — Tenant Improvement Schedule

CHECK THE BOX FOR ANY OF THE FOLLOWING THAT WILL APPLY. CAPITALIZED TERM USED IN THE RIDERS SHALL HAVE THE MEANING GIVEN TO THEM IN THE LEASE.

☒ Rent Rider

☐ Arbitration Rider

☐ Letter of Credit Rider

☐ Guaranty of Tenant's Lease Obligations Rider

☒ Option to Extend Rider

35. AGENCY DISCLOSURE. At the signing of this Lease, Landlord is represented by None (insert both the name of the Broker and the Firm as licensed) (the "Landlord's Broker"), and Tenant is represented by Paul Jacobson with Regency Group, Inc. (insert both the name of the Broker and the Firm as licensed) (the "Tenant's Broker").

This Agency Disclosure creates an agency relationship between Landlord, Landlord's Broker (if any such person is disclosed), and any managing brokers who supervise Landlord's Broker's performance (collectively the "Supervising Brokers"). In addition, this Agency Disclosure creates an agency relationship between Tenant, Tenant's Broker (if any such person is disclosed), and any managing brokers who supervise Tenant's Broker's performance (also collectively the "Supervising Brokers"). If Tenant's Broker and Landlord's Broker are different real estate licensees affiliated with the same Firm, then both Tenant and Landlord confirm their consent to that Firm and both Tenant's and Landlord's Supervising Brokers acting as dual agents. If Tenant's Broker and Landlord's Broker are the same real estate licensee who represents both parties, then both Landlord and Tenant acknowledge that the Broker, his or her Supervising Brokers, and his or her Firm are acting as dual agents and hereby consent to such dual agency. If Tenants' Broker, Landlord's Broker, their Supervising Brokers, or their Firm are dual agents, Landlord and Tenant consent to Tenant's Broker, Landlord's Broker and their Firm being compensated based on a percentage of the rent or as otherwise disclosed on the attached addendum. Neither Tenant's Broker, Landlord's Broker nor either of their Firms are receiving compensation from more than one party to this transaction unless otherwise disclosed on an attached addendum, in which case Landlord and Tenant consent to such compensation. Landlord and Tenant confirm receipt of the pamphlet entitled "The Law of Real Estate Agency."

36. COMMISSION AGREEMENT. If Landlord has not entered into a listing agreement (or other compensation agreement with TENANT'S Broker), Landlord agrees to pay a commission to TENANT'S Broker (as identified in the Agency Disclosure paragraph above) as follows:

☒ $7,500.00

☐ _____% of the gross rent payable pursuant to the lease

☐ $_____ per square foot of the Permises

☐ Other _____

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 19 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

Landlord's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled to a commission upon the extension by Tenant of the Lease term pursuant to any right reserved to Tenant under the Lease calculated ☐ as provided above or ☐ as follows ______ (if no box is checked, as provided above). Landlord's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled to a commission upon the extension by Tenant of the Lease term pursuant to any right reserved to Tenant under the Lease calculated ☐ as provided above or ☐ as follows ______ (if no box is checked, as provided above). Landlord's Broker ☐ shall ☐ shall not (shall not if not filled in) be entitled to a commission upon any expansion of Premises pursuant to any right reserved to Tenant under the Lease, calculated ☐ as provided above or ☐ as follows_______ (if no box is checked, as provided above).

Any commission shall be earned upon execution of this Lease, and paid one-half upon execution of the Lease, and one-half upon occupancy of the Premises by Tenant AND TENANT BEING OPEN FOR BUSINESS.

If any other lease or sale is entered into between Landlord and Tenant pursuant to a right reserved to Tenant under the Lease, Landlord ☐ shall ☐ shall not (shall not if not filled in) pay an additional commission according to any commission agreement or, in the absence of one, according to the commission schedule of Landlord's Broker in effect as of the execution of this Lease. Landlord's successor shall be obligated to pay any unpaid commissions upon any transfer of this Lease and any such transfer shall not release the transferor from liability to pay such commissions.

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 23 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

EXHIBIT A

[Legal Description of the Property]

A unit of land with a 3,700 square foot (approximate size) building located in the state of Washington within the county of King, with an address of 2215 4th Ave. S., Seattle, WA 98134-1516. Tax parcel number 766620-5165. BLK 293 Lot 3 Seattle Tide LDS.

Exhibit A

Association 2011

CBA Form ST-NNN

Single Tenant NNN Lease

Page 24 of 24

LEASE AGREEMENT

(Single Tenant For Entire Parcel - NNN)

EXHIBIT B

[Tenant Improvement Schedule (Landlord's Work)]

1.	Tenant Improvements to be Completed by Landlord

Tenant accepts the Premises in an "as is," "where is," "with all faults" condition. However, Landlord at Landlord's expense will replace the metal roof over the back warehouse portion of the building prior to December 1, 2013. Tenant shall cooperate with Landlords contractors.

2.	Tenant Improvements to be Completed by Tenant

Tenant at Tenant's expense shall make floor plan, decor, security and air filtration modifications as necessary with Landlord's approval, which shall not unreasonably be delayed or withheld. All construction work shall be completed to building code and, as necessary, by licensed bonded contractors.

OPTION TO EXTEND RIDER

This Option to Extend Rider ("Rider") is made part of the Lease Agreement dated September 19, 2013 (the "Lease") between M-P Properties ("Landlord") and Diego Pellicer Worldwide, Inc., a Delaware corporation ("Tenant") concerning the Premises located at the property commonly known as 2215 4^th Ave S., Seattle, WA 98134 (the "Property").

Extension of Lease. Provided Tenant is not in default of any provision of the Lease at the time that Tenant exercises the right to extend the Lease or at the time the new term begins, Tenant shall have one (1) successive option to extend the term of the Lease for five (5) years. The term of the Lease shall be extended on the same terms, conditions and covenants set forth in the Lease, except that (i) the amount of the Base Rent stated in the Lease shall be adjusted as set forth below; (ii) there shall be no free or abated rent periods, tenant improvement allowances or other concessions that may have been granted to Tenant at the beginning of the initial term hereof; and (iii) after exercise of Tenant's final extension term option, there shall be no further extension or renewal term options.

2.	Notice. To extend the Lease, Tenant must deliver written notice to Landlord not less than one hundred twenty (120) days prior to the expiration of the then-current Lease term. Time is of the essence of this Rider.

3.	Base Rent.

Term	Base Monthly Rent
10/1/18 — 9/30/19	$7,126.12 plus NNN's
10/1/19 — 9/30/20	$7,375.53 plus NNN's
10/1/20 — 9/30/21	$7,633.68 plus NNN's
10/1/21 — 9/30/22	$7,900.85 plus NNN's
10/1/22 — 9/30/23	$8,177.38 plus NNN's

Exhibit 99.1

DIEGO PELLICER WORLDWIDE, INC.

INDEX

	PAGES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	2

BALANCE SHEETS	3

STATEMENTS OF OPERATIONS	4

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)	5

STATEMENTS OF CASH FLOW	6

NOTES TO FINANCIAL STATEMENTS	7-17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Diego Pellicer Worldwide Inc.

West Lin, Oregon

We have audited the accompanying balance sheet of Diego Pellicer Worldwide Inc. as of December 31, 2014 and 2013, and the related statements of operations, changes in stockholders’ equity (deficiency), and cash flows for the year ended December 31, 2014, and from inception (August 26, 2013) to December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Diego Pellicer Worldwide Inc. as of December 31, 2014 and 2013 and the results of its operations and its cash flows for the year ended December 31, 2014 and the period from inception (August 26, 2013) to December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. As disclosed in Note 3, The Company has collected minimal revenue since inception The Company has incurred losses since inception and its current liabilities exceed its current assets by $1,610,788 and has a stockholders’ deficiency of $932,231 as December 31, 2014. As discussed in Note 12, on May 23, 2014 the Company received a subpoena from the United States Department of Justice. Depending on the extent to which the Department of Justice pursues this matter, the Company may be required to suspend or cease operations. These factors among others raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Hackensack, New Jersey

March 13, 2015

DIEGO PELLICER WORLDWIDE, INC.

BALANCE SHEETS

	December 31, 2014			December 31, 2013
Assets

Current assets:
Cash and equivalents	$	33,101		$	140,084
Prepaid expenses		8,946			7,806
Due from related party		-			54,341
Total current assets		42,047			202,231

Property and Equipment, net		253,990			-

Other assets:
Investment, at cost		525,567			-
Security deposits		173,000			20,000
Deposits - End of Lease		150,000			-
Total other assets		848,567			20,000

Total assets	$	1,144,604		$	222,231

Liabilities and Stockholders’ Equity (Deficiency)

Current liabilities:
Accounts payable	$	298,939		$	15,571
Accrued expenses - related party		124,333			75,730
Accrued Compensation		1,176,563			-
Deferred Revenue		53,000			-
Loan payable - related party		-			17,000
Total current liabilities		1,652,835			108,301

Deferred revenue		424,000			-
Total Liabilities		2,076,835			108,301

Stockholders’ equity (deficiency):
Series A Preferred stock, $0.0001 par value, 10,000,000 shares authorized, as of December 31, 2014 and December 31, 2013, shares issued were 4,836,769 and 561,676 and outstanding were 4,778,569 and 561,676		484			56
Series B Preferred stock, $0.0001 par value, 3,000,000 shares authorized, as of December 31, 2014, shares issued and outstanding were 200,000		20			-
Common stock, $0.0001 par value, 87,000,000 shares authorized, as of December 31, 2014 and December 31, 2013 shares issued and outstanding were 13,520,000		1,352			1,352
Additional paid-in capital		4,333,980			526,520
Treasury shares, at cost		(87,300	)		-
Subscription receivable		-			(1,352	)
Accumulated deficit		(5,180,767	)		(412,646	)
Total stockholders’ equity (deficiency)		(932,231	)		113,930

Total liabilities and stockholders’ equity	$	1,144,604		$	222,231

See Accompanying Notes to Financial Statements.

DIEGO PELLICER WORLDWIDE, INC.

STATEMENTS OF OPERATIONS

				From Inception
	Year Ended			(August 26, 2013) to
	December 31,			December 31,
	2014			2013
REVENUES
Rental income	$	497,638		$	-
Licensing revenue		48,567			-
Provision for uncollectible rents		(497,638	)		-
Total Revenues		48,567			-

COSTS AND EXPENSES (other income)
General and administrative expenses		3,624,507			412,646
Rent expense		487,533			-
Interest income		(73,198	)		-
Write-off of credit line receivable		777,846			-
Total Costs and Expenses		4,816,688			412,646

Loss before provision for taxes		(4,768,121	)		(412,646	)
Provision for taxes		-			-
NET LOSS	$	(4,768,121	)	$	(412,646	)

Net loss per share – basic and fully diluted	$	(0.35	)	$	(0.03	)

Weighted Average Common Shares Outstanding - basic and diluted		13,520,000			13,520,000

See Accompanying Notes to Financial Statements.

DIEGO PELLICER WORLDWIDE, INC.

STATEMENTS OF CHANGE IN STOCKHOLDER'S EQUITY (DEFICIENCY)

	Shares									$
										Common									Additional
	Common		Treasury			Preferred				Treasury					Preferred				Paid-in		Accumulated			Subscription
	Shares		Shares			Series A		Series B		Stock		Shares			Series A		Series B		Capital		Deficit			Receivable			Total
Balance at inception - August 26, 2013		-		-			-		-		-		-			-		-		-		-			-		$	0

Issuance of founders shares		13,520,000		-			-		-	$	1,352		-			-		-		-		-		$	(1,352	)		-
Issuance of Preferred stock for services		-		-			3,733		-		-		-			-		-		3,500		-			-			3,500
Issuance of Preferred shares and warrants for cash		-		-			557,943		-		-		-			56		-		523,020		-			-			523,076
Net loss		-		-			-		-		-		-			-		-		-		(412,646	)		-			(412,646	)
Balance – December 31, 2013		13,520,000		-			561,676		-		1,352		-			56		-		526,520		(412,646	)		(1,352	)		113,930

Issuance of Preferred shares and warrants for cash		-		-			4,275,093		200,000		-		-			428		20		3,807,460		-			-			3,807,908
Treasury shares acquired		-		(58,200	)		-		-		-		(87,300	)		-		-		-		-			-			(87,300	)
Subscription received		-		-			-		-		-		-			-		-		-		-			1,352			1,352
Net loss		-		-			-		-		-		-			-		-		-		(4,768,121	)		-			(4,768,121	)
Balance – December 31, 2014		13,520,000		(58,200	)		4,836,769		200,000	$	1,352	$	(87,300	)	$	484	$	20	$	4,333,980	$	(5,180,767	)		-		$	(932,231	)

See Accompanying Notes to Financial Statements.

DIEGO PELLICER WORLDWIDE, INC.

STATEMENTS OF CASH FLOW

				From Inception
	Year Ended			(August 26, 2013) to
	December 31,			December 31,
	2014			2013
Operating Activities
Net Loss	$	(4,768,121	)	$	(412,646	)
Adjustments to reconcile net Loss to net cash provided by operating
Amortization of deferred revenue		(48,567	)		-
Interest income		(70,596	)		-
Accrued expenses - related party		48,603			75,730
Non-cash compensation		1,176,563			-
Write-off of credit line receivable		777,846			-
Changes in operating assets and liabilities:
Prepaid expenses		(1,140	)		(7,806	)
Accounts payable		283,368			15,571
Net cash used in operating activities		(2,602,044	)		(329,151	)

Investing Activities
(Advances to) repayment from related party		54,341			(54,341	)
Acquisition of property and equipment		(253,990	)		-
Security deposits		(153,000	)		(20,000	)
Deposits - end of lease		(150,000	)		-
Advances under line of credit		(707,250	)		-
Net cash used in investing activities		(1,209,899	)		(74,341	)

Financing Activities
Collection of subscriptions receivable	$	1,352		$	-
Proceeds from (repayment) of loan - related party		(17,000	)		17,000
Proceeds from sale of preferred stock and warrants		3,807,908			526,576
Acquisition of treasury stock		(87,300	)		-
Net cash provided by financing activities		3,704,960			543,576

Net (Decrease) Increase in Cash		(106,983	)		140,084
Cash - beginning of period		140,084			-
Cash - end of year	$	33,101		$	140,084
Supplemental disclosure of non-cash activity:
Investment acquired through licensing agreement	$	525,567		$	-

See Accompanying Notes to Financial Statements.

DIEGO PELLICER WORLDWIDE, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2014

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Organization

Diego Pellicer Worldwide, Inc. (“the Company”) was incorporated on August 26, 2013, under the laws of the State of Delaware.

The Company acquires and leases real estate to licensed marijuana operators, including but not limited to, providing complete turnkey growing space, processing space, recreational and medical retail sales space and related facilities to licensed marijuana growers, processors, dispensary and recreational store operators. Additionally, the Company plans to explore ancillary opportunities in the regulated marijuana industry as well as offering for wholesale distribution branded non-marijuana clothing and accessories.

The Company does not and will not, until such time as Federal law allows, grow, harvest, process, distribute or sell marijuana or any other substances that violate the laws of the United States of America, or any other country.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

New accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company's accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions and share based payment arrangements, determining the fair value of the warrants received for the licensing agreement , the collectability of accounts receivable and deferred taxes and related valuation allowances. Certain of our estimates, including evaluating the collectability of accounts receivable, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary.

Fair value of financial instruments

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Cash

Property and equipment and depreciation policy

The Company intends to take depreciation or amortization on a straight-line basis for all properties, beginning when they are put into service, using the following life expectancy:

Equipment – 5 years

Leasehold Improvements – 10 years, or the term of the lease, whichever is shorter

Buildings – 20 years

Revenue recognition

Leases

Income Taxes

Research and development costs

Research and development costs are charged to the statement of operations as incurred.

Preferred Stock

Common Stock Purchase Warrants and Other Derivative Financial Instruments

Stock-Based Compensation

Loss per common share

Net loss per share is provided in accordance with ASC Subtopic 260-10. We present basic loss per share (“EPS”) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Loss per common share has been computed using the weighted average number of common shares outstanding during the year

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has collected minimal revenue since inception The Company has incurred losses since inception and its current liabilities exceed its current assets by $1,610,788 and has a stockholders’ deficiency of $932,231 as December 31, 2014. As discussed in Note 12, on May 23, 2014 the Company received a subpoena from the United States Department of Justice. Depending on the extent to which the Department of Justice pursues this matter, the Company may be required to suspend or cease operations. These factors among others raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Management believes that the Company's future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds from its stockholders. The Company's inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company intends to continue to raise additional capital and assist the leaseholder in obtaining the proper licenses in order to conduct their business in growing, processing and retailing cannabis products. Once the licenses are granted, we believe that a steady stream of income will be achieved and the repayment of our advances would begin.

NOTE 4 – REVOLVING CREDIT LINE

A sub-lessee, who is operating out of three separate properties leased to him by the Company, is required to obtain a State operating license to grow, process and sell cannabis products. Until the tenant receives such license, the Company has agreed to and entered into a $2,500,000 revolving line of credit with the lessee. This line of credit was established to provide funding to the lessee, consisting of two separate elements: (a) to fund operational costs until the development stage is completed, and (b) to underwrite the rent due on the sublease agreements. In addition, interest is accruing at the annual rate of 20% on the average monthly amount due on this line of credit. As of December 31, 2014, the Company has advanced an aggregate of $707,250 towards this line of credit, and has accrued interest of $70,596. The Company has recorded a reserve for the total advance and accrued interest.

NOTE 5 - INVESTMENT

Investment

In January 2014, the Company entered into an Agreement with Plandai Biotechnology, Inc. (a publicly traded company) to license to them certain intellectual property rights in exchange for warrants to purchase 3,333,334 shares of Plandai Biotechnology, Inc. (“Plandai”) common stock. This license agreement carries a 10-year term with an exercise price of $0.01 per share. The Company is to obtain certain Trademark rights certified by the government (expected by early summer 2015). On October 10, 2014 the Company filed its Notice of Exercise to execute the warrants to acquire the shares of Plandai, in which the shares have not yet been issued. The sale of such shares has a "leak out" restriction on them requiring that the sale of such shares must reach a certain traded price of $0.50 per share. The Company used a third party appraisal firm to ascertain the fair value of warrants held by the company, which was determined to be $525,567. With the Plandai shares currently trading at $.22 per share, the Company believes there has been no impairment in the value of its investment. The Company accounts for its investment under the cost method of accounting.

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment

The Company has incurred expenses in the build out of one of its leased properties and acquired a large POD equipment for use in growing operations by lessee. Since the facility and equipment have not yet been put into service, no amortization on the leasehold improvement nor depreciation on the equipment has been provided.

NOTE 7 – OTHER ASSETS

Security deposits

These deposits reflect the deposits on various property leases, most of which call for two months of rental.

Deposits – end of lease

These deposits represent an additional two months of rent on various property leases that apply to the "end-of-lease" period.

NOTE 8 – RELATED PARTY

As of December 31, 2014 and 2013, the Company has unpaid consulting fees to related parties in the amount of $124,333 and $75,730, respectively. For the year ended December 31, 2014 and from the inception (August 26, 2013) through December 31, 2013, the consulting fees expensed were $693,417 and $177,500, respectively to related parties.

In 2014, the Company made short term advances to one of its founding stockholders in the amount of $85,000. It was subsequently agreed under a Board Resolution that the Company would acquire 58,200 Treasury shares of its common stock at the price of $1.50 per share in exchange for the outstanding debt and accrued interest thereon of $87,300. There were no other related party transactions for the years ended December 31, 2014 and December 31, 2013.

NOTE 9 - STOCKHOLDERS’ EQUITY

The total number of shares that the Company has authority to issue is up to one-hundred million (100,000,000) of which eighty-seven million shares (87,000,000) are designated as common shares; ten million (10,000,000) shares are designated as Series A Preferred, and three million (3,000,000) shares are designated as Series B Preferred. The Common shares, as well as the Series A and B Preferred shares have a par value of $0.0001.

On August 26, 2013, the Company issued 13,250,000 shares of its common stock to its founders at par value as a subscription receivable which was paid on December 30, 2014.

The Company under a Series A Convertible Preferred Share Plan, offered such stock and related warrants at a price of $0.9375 per share. The shares carried attached warrants (equal to 20% of shares acquired) only if the investment met the minimum of 1,066,666 shares purchased. In March 2014, a single investor was offered a discounted price of $0.78125 for the volume purchase of 3.2 million shares, with the attached warrants have an exercise price of $1.24 per share. In June 2014 and thereafter, subsequent investors had the restricted minimum purchase for the attached warrants removed under this Series A Preferred Share Plan and have an exercise price of $1.40 per share. The total number of warrants issued in 2014 were 790,798. No warrants were issued in 2013.

For the years ended December 31, 2014 and from inception (August 26, 2013) through December 31, 2013, the Company sold 4,275,093 and 561,676 Series A Preferred shares, respectively. Proceeds received in each year were $3,507,907 and $526,576, respectively.

In December, the Company offered Series B Preferred shares at $1.50 per share together with warrants (equal to 20% of shares purchased) at a price of $1.50 per share. In December 2014, The Company issued 200,000 shares for proceeds received in the amount of $300,000.

As of December 31, 2014, the total number of warrants outstanding were 720,798.

All of the underlying shares under both the Series A and Series B Preferred shares have been sold pursuant to SEC Rule 144 or may be sold pursuant to SEC Rule 144 without the requirement for the Company to be in compliance with the current public information required under SEC Rule 144. The restrictive holding period is six months following the effective date of the Company’s merger into a public shell, and declared effective by the United States Securities and Exchange Commission (the “SEC”).

The Company maintains an Equity Incentive Plan pursuant to which 2,480,000 shares of Common Stock are reserved for issuance thereunder. As of December 31, 2014 and 2013, 320,000 shares under this plan had been issued to certain founding members, who were instrumental in the development of the Company and were included in the original issuance of common shares, and are reflected in the 13,520,000.

NOTE 10 - INCOME TAXES

The reconciliation of income tax benefit at the U.S. statutory rate of 34% for the years ended December 31, 2014 and 2013 to the Company’s effective tax rate is as follows:

The reconciliation of income tax benefit at the U.S. statutory rate of 34% for the year ended December 31, 2014 and for the period from inception (August 26, 2013) to December 31, 2013 to the Company’s effective tax rate is as follows:

	Year Ended December 31, 2014			From Inception (August 26, 2013) to December 31, 2013
Statutory federal income tax rate		-34	%		-34	%
State income tax, net of federal benefits		-6	%		-6	%
Valuation Allowance		-40	%		-40	%
Income tax provision (benefit)		-80	%		-80	%

The benefit for income tax is summarized as follows:

	Year Ended December 31, 2014			From Inception (August 26, 2013) to December 31, 2013
Federal
Current	$	-		$	-
Deferred		(1,620,000	)		(140,000	)
State
Current		-			-
Deferred		(285,000	)		(25,000	)
Change in valuation allowance		(1,905,000	)		(165,000	)
Income tax provision (benefit)	$	-		$	-

As of December 31, 2014 and 2013, the Company had $4,768,121 and $412,646 Federal net operating loss carryovers (“NOLs”), which begin to expire in 2033. Utilization of NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

The Company files U.S. Federal and various State tax returns that are subject to audit by tax authorities beginning with the year ended December 31, 2013. The Company’s policy is to classify assessments, if any, for tax and related interest and penalties as tax expense.

The tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2014 and 2013 are as follows:

	Year Ended December 31, 2014		From inception (August 26, 2013) to December 31, 2013
Deferred tax asset
Net operating loss carryovers	$	1,905,000	$	165,000
Total deferred tax assets		1,905,000		165,000
Valuation Allowance		1,905,000		(165,000	)
Deferred tax asset, net of allowance	$	-	$	-

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The Company’s business is essentially to lease property in appropriate areas to make available such property for sub-lease to specifically assigned businesses that grow, process and sell certain products to the general public. Currently the Company has five (5) separate properties under lease in the States of Colorado, Washington and Oregon.

In Colorado, there are three properties leased in 2014. Each property was leased for a five (5) year period with an option for an additional five (5) years, and carry terms requiring triple net (NNN) conditions. Each of the properties, except for one, have fixed monthly rentals (exclusive of the triple net terms). As of December 31, 2014, the aggregate minimal annual lease payments under these operating leases were as follows:

2015		987,364
2016		1,000,326
2017		1,011,618
2018		1,023,246
2019		526,199
TOTAL	$	4,548,753

In Washington, there is only one (1) property leased in 2014. The property was leased for a five (5) year period with an option for an additional five (5) years, and carry terms requiring triple net (NNN) conditions. The property has an escalating annual rental (exclusive of the triple net terms). As of December 31, 2014, the aggregate minimal annual lease payments under these operating leases were as follows:

2015		82,371
2016		84,999
2017		87,723
2018		67,365
TOTAL	$	322,458

In Oregon, there is only one (1) property leased in 2014. The property was leased for a five (5) year period with an option for an additional five (5) years, and carry terms requiring triple net (NNN) conditions. The property has an escalating annual rental (exclusive of the triple net terms). As of December 31, 2014, the aggregate minimal annual lease payments under these operating leases were as follows:

2015		62,620
2016		63,828
2017		65,060
2018		66,316
2019		44,776
TOTAL	$	302,600

Rent expense for the Company’s operating leases for the year ending December 31, 2014 was $550,025.

NOTE 12 – LEGAL PROCEEDINGS

On May 23, 2014 Diego Pellicer Worldwide Inc. received a subpoena from the United States Department of Justice, represented by the United States Attorney’s Office for the Western District of Washington, requesting the production of the Company’s banking records and documents and records relating to: the structure and organization of the Company; communications between the Company and its affiliates, including Diego Pellicer, Inc., with potential investors; securities offerings; applications submitted by Diego Pellicer, Inc. to the Washington State Liquor Control Board in connection with its application to become a retail seller of cannabis in Washington State; and the Company’s relationship with Plandai Biotechnology.

The Company believes that it has complied fully with all applicable laws, rules and regulations, and intends to cooperate fully with the government’s investigation.

NOTE 13 - SUBSEQUENT EVENTS

The Company has evaluated events after the date of these financial statements through March 13, 2015, the date that these financial statements were issued and the material subsequent events, which would require adjustment to or disclosure in the financial status, are as follows:

On January 2, 2015, the Board of Directors issued a Resolution authorizing 200,000 warrants to certain consulting group for their efforts in the development the company structure. These warrants have an exercise price at the $0.0001 par value and are convertible into common shares of the Company.

Between February 11, 2015 and February 24, 2015, the Company sold an additional 466,666 Series B Preferred shares at par value of $0.0001 at a price of $1.50 per share. Upon merger into the public shell, the shares will convert into one common share of the new Company.

On March 11, 2015 (the “Closing Date”), Diego Pellicer Worldwide, Inc. (f/k/a Type 1 Media, Inc.) (the “Company” or “PubCo”) closed on a merger and share exchange agreement (the “Merger Agreement”) by and among (i) the Company, and (ii) Diego Pellicer World-wide 1, Inc., a Delaware corporation, (“Diego”), and (iii) Jonathan White, the majority shareholder of the Company (the “Majority Shareholder”). Pursuant to the terms of the Merger Agreement, Diego shall be merged with and into the Company, with the Company to continue as the surviving corporation (the “Surviving Corporation”) in the Merger, and the Company succeeding to and assuming all the rights, assets, liabilities, debts, and obligations of Diego (the “Merger”).

In anticipation of the Merger, the Company changed its name from “Type 1 Media, Inc.” to “Diego Pellicer Worldwide, Inc.” on February 26, 2015.

Exhibit 99.2

DIEGO PELLICER WORLDWIDE, INC.

Unaudited Pro Forma Balance Sheets

December 31, 2014

	Diego Pellicer
	Worldwide, Inc.			Type 1 Media, Inc.
	December 31, 2014			December 31, 2014			Adjustments			Consolidated
Assets

Current assets:
Cash and equivalents	$	33,101		$	25,473		$	-		$	58,574
Prepaid expensed		8,946			-			-			8,946
Total current assets		42,047			25,473			-			67,520

Property and Equipment, net		253,990			1,548			-			255,538

Other assets:
Investment, at cost		525,567			-			-			525,567
Deposits		323,000			-			-			323,000
Total other assets		848,567			-			-			848,567

Total assets	$	1,144,604		$	27,201		$	-		$	1,171,625

Liabilities and Stockholders’ Equity (Deficiency)

Current liabilities:
Accounts payable	$	298,939		$	65,178		$	-		$	364,117
Accrued expenses - related party		124,333			16,025			-			140,358
Accrued Compensation		1,176,563			-			-			1,176,563
Deferred Revenue		53,000			-			-			53,000
Total current liabilities		1,652,835			81,203			-			1,734,038

Deferred revenue		424,000			-			-			424,000
Total Liabilities		2,076,835			81,203			-			2,158,038

Stockholders’ equity (deficiency):
Preferred stock		504			-			-			504
Common stock		1,352			6			-			1,358
Additional paid-in capital		4,333,980			(1,778	)		(52,410	)		4,279,792
Treasury shares, at cost		(87,300	)		-			-			(87,300	)
Accumulated deficit		(5,180,767	)		(52,410	)		52,410			(5,180,767	)
Total stockholders’ equity (deficiency)		(932,231	)		(54,182	)		-			(986,413	)

Total liabilities and stockholders’ equity	$	1,144,604		$	27,021		$	-		$	1,171,625

DIEGO PELLICER WORLDWIDE, INC.

Unaudited Pro Forma Statements of Operations

December 31, 2014

	Diego Pellicer
	Worldwide, Inc.			Type 1 Media, Inc.
	December 31, 2014			December 31, 2014			Adjustments		Consolidated

REVENUES	$	48,567		$	52,033			-	$	100,600

OPERATING EXPENSES (net)		4,816,688			71,788			-		4,888,476

OTHER INCOME		-			4,092			-		4,092

NET LOSS	$	(4,768,121	)	$	(15,663	)		-	$	(4,783,784	)

Pursuant to the Share Exchange:

In connection with the closing of the Merger, on the Closing Date, Jonathan White and Thomas Baxter submitted to the Company a resignation letter pursuant to which they resigned from their positions as officers and member of the Board of Directors of the Company. Messrs. White and Baxter’s resignations were not a result of any disagreements relating to the Company’s operations, policies or practices. On the Closing Date, board of directors of the Company (the “Board”) and the majority stockholders of the Company (the “Shareholders”) accepted the resignations of Messrs. White and Baxter and, contemporaneously appointed: (i) Philip Gay to serve as the Chief Executive Officer and member of the Board of Directors, (ii) Ron Throgmartin to act as Chief Operating Officer, (iii) Nick Roberts to act as Chief Financial Officer; and (iv) Alan Valdes, Douglas Anderson, and Stephen Norris to serve as members of the Board of Directors.

In anticipation of the Merger, the Company changed its name from “Type 1 Media, Inc.” to “Diego Pellicer Worldwide, Inc.” on February 26, 2015.

Cancellation Agreement

In connection with the Merger, the Company entered into a cancellation agreement with the Majority Shareholder (the “Cancellation Agreement”) whereby the Majority Shareholder, owning an aggregate of 55,000,000 (post-split) shares of the Company’s common stock, par value $0.000001 per share (the “Common Stock”) agreed to cancel the 55,000,000 shares of Common Stock, in exchange for $169,000.

The completion of the Share Exchange resulted in a change of control. The Share Exchange was accounted for as a reverse merger and recapitalization. Type 1 Media Inc. was the acquirer for financial reporting purposes and the Company was the acquired company.

Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Share Exchange were those of Diego Pellicer Worldwide, Inc. and was recorded at its historical cost basis; and the consolidated financial statements after completion of the Share Exchange included the assets and liabilities of the Company and Type 1 Media Inc. historical operations of Type 1 Media Inc. and operations of the Company from the closing date of the Share Exchange

The following unaudited pro forma combined balance sheets and income statements are based on historical financial statements of Type 1 Media Inc. as if the transaction had occurred during the period ended December 31, 2014, the date of accounting acquirer’s most recent period end.

The unaudited pro forma combined financial statements are provided for information purposes only. The pro forma financial statements are not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed at the dates indicated below. In addition, the unaudited pro forma combined financial statements do not purport to project the future financial position or operating results of the combined company. The unaudited pro forma combined financial information has been prepared in accordance with the rules and regulations of the Securities and Exchange Commission.

For pro forma purposes:

·	The unaudited Pro Forma Combined Balance Sheets as of December 31, 2014 of the companies give effect to the transaction as if it had occurred at the beginning of the most recent year/period ended.

·	The unaudited Pro Forma Combined Statements of Operations for the period ended December 31, 2014 combines the income statements of the companies for the indicated periods, giving effect to the transaction as if it had occurred at the beginning of those periods.

These unaudited pro forma combined financial statements and accompanying notes should be read in conjunction with the separate audited financial statements of Type 1 Media Inc. as of and for the year ended December 31, 2014.

Exhibit 99.3

Diego Pellicer Worldwide Begins Trading Publicly

Under Symbol “TPMD”

Developing the World’s First Premium Marijuana Brand

LOS ANGELES, CA -- (Accesswire) – March 19, 2015 – Diego Pellicer Worldwide, Inc. (OTCBB:TPMD), a real estate and a consumer retail development company that is focused on developing Diego Pellicer as the world’s first “premium” marijuana brand, today announced the commencement of trading under the ticker symbol “TPMD” effective March 19, 2015. Additional information on this transaction can be found in the company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2015.

Diego Pellicer Worldwide Inc. (Diego), is a real estate and a consumer retail development company that is focused on developing Diego Pellicer as the world’s first “premium” marijuana brand by adhering to the highest quality and standards for its facilities servicing both cannabis and non-cannabis products. The company’s initial focus is to acquire and develop legally compliant real estate locations for the purposes of leasing them to state licensed companies in the cannabis industry. Diego does not grow or sell marijuana or marijuana infused products in the early stages of this plan however, the company will be properly positioned to take advantage of pre-negotiated acquisition contracts with selected Diego tenants in marijuana retail and production facilities throughout the country instantaneously with the change of federal law.

Mr. Philip Gay, Chief Executive Officer of Diego Pellicer Worldwide Inc., commented, “Our vision is to continue to develop Diego Pellicer as a premium brand that is valued and positioned to appeal to a broad customer base, similar to what Davidoff is to cigars, Godiva to chocolate and Starbucks to coffee to take advantage of the emerging legalized cannabis industry in which the market is projected to grow annually by 27% over the next three years to an expected market value greater than $8B by the end of 2018.”

In addition, “Diego believes that in the very near future, the US and other countries will embrace the will of the people, and legalize the responsible adult use of marijuana. Legalizing national and international commerce of marijuana, will allow Diego to take its brand and unmatched quality standards to markets all around the globe.”

About Diego Pellicer Worldwide, Inc.

Diego Pellicer Worldwide, Inc. is a real estate and a consumer retail development company that is focused on developing Diego Pellicer as the world’s first “premium” marijuana brand by adhering to the highest quality and standards for its facilities along with both cannabis and non-cannabis products. The company’s initial focus is to acquire and develop legally compliant real estate locations for the purposes of leasing them to state licensed companies in the cannabis industry. Diego does not grow or sell marijuana or marijuana infused products in the early stages of this plan.

For more information, check out: http://diegopellicer.com

Forward-Looking Statements

Forward-Looking Statements. This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “prospects,” “outlook,” and similar words or expressions, or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company’s forward-looking statements, please see the Company’s Form 8-K filed on March 19, 2015, including but not limited to the discussion under “Risk Factors” therein, which the Company has filed with the SEC and which may be viewed at http://www.sec.gov.

Contact Information

Hayden IR

Cameron Donahue

cameron@haydenir.com

651-653-1854

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