BEFORE THE WASHINGTON STATE LIQUOR AND CANNABIS BOARD IN THE MATTER OF: OAH NO. 01-2017-LCB-00178 LCB NO.- HL SOUTH, LLC dfbfa THEOREM afkfa VELA FINAL ORDER OF THE BOARD 1944 1ST STREET, #100 . @aosossaj- SEATTLE, WA 98134 . - LICENSEE LICENSE AMENDED AVN NO. 1Y6095A The above-titled matter having come before the Board upon Global Stipulated Settlement Agreement between the Enforcement and Education Division of the Washington State Liquor and Cannabis Board and the Licensee, and the Board having reviewed the Stipulated Settlement Agreement: IT IS HEREBY ORDERED that the Stipulated Settlement Agreement for case number is adopted in its entirety. Pursuant to the agreement, the True Party of Interest and the Unapproved Changes in Existing Ownership violations alleged in Amended AVN No. 1Y6095A and Complaint are sustained. The Licensee shall provide any and all documents in its possession concerning any and all true parties of interest, including ?nanciers, to the Licensing and Regulation Division, and shall comply with all deadlines set by Licensing. The monetary penalty of ?fty thousand dollars ($50,000) shall be paid by the Licensee in ?ve FINAL ORDER OF THE BOARD 1 OFFICE OF THE ATTORNEY GENERAL . 1125 Washington Street SE PO Box 40100 Olympia, WA 98504-0100 (360) 664-9006 43binstallments of ten thousand dollars ($10,000) as follows: ?rst installment June 1, 2017; second installment July 3, 2017; third installment. August 1, 2017; fourth installment? September 1, 2017; ?fth installment October 2, 2017. Payments shall be made no later than 4:00 pm. on the applicable date and sent to: Washington State Liquor and Cannabis Board PO Box 43085 Olympia, WA 98504-3085 In the event the Licensee fails to make full and timely payments of the monetary penalty, it shall be subject to marijuana license cancellation and the seizure and destruction of its marijuana inventory. The Misrepresentation of Fact/Failure to Disclose violation in Amended AVN No. 1Y6095A and Complaint is hereby dismissed. ('qu A I dayof .: :01? .2017. WASHINGTON STATE LIQUOR AND CANNABIS BOARD @kw t/ FINAL ORDER OF THE BOARD 2 OFFICE OF THE ATTORNEY GENERAL 1125 Washington Street SE . - PO Box 40100 Olympia, WA 93504.0100 (360) 664-9006 y?i LICENSE No. 41553;?: AMENDED AVN NO. BEFORE THE STATE LIQUDR AND CANNABIS IN. THE 0F: (BAH 01-201 78 . LGB N0. M46348 HL SOUTH, LLC d/bxa . VELA. GLOBAL-STIFULAWD . . . SETTLEMENT AGREEMENT 1944 STREET, #100 WA 98.134 LICENSEE Ch The: Washihgmzi State Liquor and Cannabis Board. Enferwment. and Educatiarx Division (Enforo-emam), by and ?through its a?eme?ysg ROBERT W, FERGUSON, Attorney General, and ARYNA Assistant A?nmay General,- and HL LLC. d/bfa. THEOREM afkfa VELA '(Licansee) by and through its :atmmays, EMILY HARRIS GANT and . 1.. ALEY of GARVEY SCHUBERT BARERQ hereby enter this: Giabai Stipulafwd 'Siettlemem Ag-rem'ent '(?iSeiilcment Agreement} for Liquor and Cannabis BewrdCase Na. - Enfarcemmt: ixsued Ammded. Administrative Violatidn Noricc (AWN) in this case: and than Camplaiht No. allagi?ng three geparaw vigiations Of: the: Washingten State Laws and. the Rules and Regulatmmi of the Board: AGREEMENT ?1 ATTORNEY GENEML 0F . 2125 Washington StremSEi 401m- LCB. NO, lad-26,248 91mm. WA 93504-9100- (mp; ??dug?o? Ch (I) The Linen-$36- anclfar its amplayeds) committed a truss: 13am of interestf?aancier viaiatim by. hiding ownershipfin-terest in HL Snuth', LLC of parsens- andfor .antities, including Christopher and Niahalas Anmirie, contrary to WAC 314654035 andxor WAC :3 1.210. This is the. kiicensee?$ "?rst. vioia?c?n of this ?kind within a three-year (3) Window, for whit]: ?the standard penalty is a cancellatian of'marijuana. Mama. Durihg the: application process any subsequeni investigatian a?ar a licenSe- has beer}; issued, the Licensee and/0r its unpim.yee(s) made a Ln'israpresanta?on (if Fact, failed 1x3 disclm a. mamria]. fact to the Beard, mommy to WAC the, Licensee: s- first vielatinn of this kind wimim a (3) Window, fur whiah the standard. penalty .15 a. cancellation. of marijuana license The Licensee- anda?or its employees committed a vialaticm. by making changes in exigtizzg Gwership prim to .g?in'ing Board app-mm! af such changes, cat-Wary in WAC 31-4~5 54-1210 am WAC 314-55435, This. is the? Licensee?s first vin'lation 9f this 1de Within a: threwyear Mndow, for which the standard panaliy is a 30-day suspension ef-marijuana Emma Enfowam?m and the L?icans?ee wish. to' reselve th? afommentiongd violatiotls in by} way o'fthis .Settlamcz? Agrcemmt I. AGREEMENT OF THE FARTIES The Parties sigma to the tbliowing: 1.- The Partias enter into-?13113 Set?emmt?Ag?wemc?tto avoid. the time; axpense; and uncertainty further litigatian. The Lican?sa? the. right of further administrative review 01? all relatad to AW Amended ANN 1Y6095A and Complaint: ?I?ha Licensee hareby valvmtarily wi?idmws its request far a hearing in this ma?a; 3.. Tim: Liz-36mm admits. committing two viclations cmtaj'ned within: Amen-dad AW Na 1Y6095-A and Complaint speci?cally that 31) Betsy-sea April 2:014 and January 201-6, the Licensee 3171er its employeaCs) a true. party 0f "interest/?nancier viala?'?n by hiding owaar?ship?intemst i253 .HL South, 0f. pcrsons entities, including Christopher Cad}! and 3 SETTLEMENT AGREEMENT 2- GENERAL OF WASHINGTON 1125 wm?ngmn- Sweet SE . . . 49103 269248 Olympi'a?WA 9859443100 {36636643306 N?ichaflas Antaine', centrary i0 WAC and?or WAC Whila thc: Licenaea admits that the violation accxiwicd, the: parties agrea that mitigating circumstances exist, Notably, Christapher Yarmll, the original applicant- a?-d-onr 0f HL Se'ut?h, had. the: primary leigation to disclose Mia Cindy and Mr, Antoine, his assoc-Ems. Mr, Yemen is no {Sanger assaciated with ?this 1319621366; 3.2.) Batman Ami! 2-014 and Oct?bar 2016, the Licensee :azizdfo'r" its. employee made Ehanges in- ex-istinig ownership grim to gaining Boa-rd approval ofsuch charges, cantrary - WAC 314354.20. and WAC 31,455,335, 4. The Licmsae amknowle'dges that the Travis Party of Interest violation, admittsd in. Seation Paragraph 3.1., swim a standard 'psnalty of cancella?an of marijuana license. The: .Licensm further acknowiedgas that ?ne Unappreved Changes in Existing- Ownership- _vi301a?i0rzs, admitted in Sectioza II, 'Paz?agmph 33; may a standard penahy of a suspens'im :oi? marijuazm license for. each change. 5. Li-canma? agrees "to prov-ids "mg Beard With all requircd information cmmeming its any and 3.1.1 true partias- of interest, imiiuding ?namiegrs, SQ that the Licmsing a?di Regulation maxi-Sim"; (Lisans?ing) may properly Wt these The. Li'msee Shall abide by an daadlinas set by Licensing?. In comidelfa?m ?fths; Licmsea?s admisg?i?n md willingness to ?nial? ism this: agraemeat and. bemuse mitigating circumstances exist, Enfm?cment agreas- to cbnvert ?ue standard. penalties dascribad in Swim i?aragraph 4. is timnsand dailar: ($56,000) mozzmary penalty. agrees to dismiss the third, vi'olat?ian: in Amended and Complaint No. as demribad in; Sm?ma I, Subsectim of Fact/Failum'ta Disciose. The mammary penalty ?stablishad shall be'pai'd 'm ?ve- in?tallments- 26f 13m mama dollars Th3 parfi?s agree 130 the paymmt scha?iule: ?rst installment June 1, 20-17; sacond in?tallment ?-122.13: 3, 201.7?; mm SETTLEMENT AGREEMENT 3 GENERAL OFWASHINGTON . Figs-Wasah?lgum ?imar SE .. . mgomawn LCB NO. 26,248 (315(3) 564~9086 10. 11. 12-5 1319' '202-6 fifth installment? October 2, 2.017. be made-no lats?r than-4:99 13.59. 911 the I applicable date and waits: cancellation and. the ssi'zure and destructisn. of'its marijuana statement sf these terms. -m August 2017; four-Eh installment September I, 2017; Washing-ton. State Liqus-r and Cannabis Board Pi}; Bax 43935 Gimpia, WA 9856443085 9.. In the avast the License-3: fails to make 'fuli and timely payments :ofihe mommy 'pensit-y established in Swtion Piaragraphs 63 arid 7, ii?- Sh?li b6 Subject 1:0 mar 383.1134 10. The partiss that this Settlemsni and the admissions. 'hsrsin? wili 110$; in and of mam-selves; he a suf?cient basis is deny renewal of ?113 Licensee?s marijuana Iieensc. .H'swevsr; this agreement and the admissions harem. shall be part of administrative: history ts be: sonsidersd by sn?dioi? Licmjsing on a gaoci faith haSi-s in astigmatism with any future visiations. sh?for bases for I 11, This caustimies the ?nai mitts]: expressihn of ail isms hetwsen Enforcsmeht and 111s Lissnses, and is is wmplete and Exclusive Hf Ni PM HI Hf .STJPULATED SETTLEMENT AGREEMENT 4 GENERAL OF wssr-amemn 112$ 'Wasliisginn Street-SE . s: . 9: i?GBex 46100 LCB M- 26?"48 01mm, WA asses-ems- (gram-664.9905 1.20 .21. 22 23' 24 25': ?26? 12; 'I?hI:r Parti?s recognize thai the Settl?m?nt Agreement is subjectt'o approYal- by. State Liquor ?and Cannabis Boardt ST AND AGREED TO by: W. FERGUSON Attorney General . . (WW - ARYNA ANDERSON, WSBA #42344 DATE Assistant: A?ome Genera] . Attorney for WAS ington State Liquor- and Cannabis Board Enforcement and Education Division . I EMILY HAIYRIs GANT: WSBA #35679 A?dz?or DATE ANDREW I wsiaA #41179 . . Attorneys for HL LLC dIb/a THEOREM ?afk/a' VELA, Lice?see SETTLEMENT AGREEMENT 5 cm WAsHmmoN . 11-25 wan-mm Struts! sas- . - PO Box 40100 LGB 25,243 0mm. WA 93594 moo (35015649006 Washington State Liquor and Cannabis Board April 26, 2017 Emily Grant and Andrew Aley Ken Jones Attorney for Licensee HL South, LLC Garvey Schubert Barer dfbfa Vela 1191 2nd Ave Ste 1800 18844 SE 42nd Seattle, WA 98101-2996 Issaquah, WA 98027-9366 Aryna Anderson, AAG GCE Division, Of?ce of Attorney General 1125 Washington Street SE PO Box 40100 Olympia, WA 98504-0100 RE: FINAL ORDER OF THE BOARD Licensee: HL South, LLC Trade Name: Theorem aka Vela Location: 1944 1St Ave #100, Seattle, WA 98134-1406 License No. 415534 LCB Hearing No. OAH No. 01 -2017-LCB-00178 AVN No. 1Y6095A UBI: 603?359?368?001?0003 Dear Parties: Please ?nd the enclosed Final Order of the Board and Declaration of Service by Mail in the above- referenced matter, as well as a copy of the Stipulated Settlement Agreement. The address for payments is PO. Box 43085, Olympia, WA 98504-3085. Please label the check(s) with your License Number and Administrative Violation Notice Number (AVN) listed above. If you have any questions, please contact me at (360) 664?1709. Si erely, i at Cal vin McCarroll Adjudicative Proceedings Coordinator Enclosures CC: Captain Thompson, Enforcement Alana Cooper, Enforcement Lieutenant Chue, Enforcement Tinaya Smith, Enforcement Lieutenant Smith, Enforcement Andrea Lee, Enforcement PO Box 43076, 3000 Paci?c Ave. SE, Olympia WA 98504-3076, (360) 664?1602, lcb.wa.gov WASHINGTON STATE LIQUOR AND CANNABIS BOARD IN THE MATTER OF: HL SOUTH, LLC d/b/ a THEOREM a/ld a VELA 1944 1ST STREET, #100 SEATTLE, WA 98134 LICENSEE LICENSE NO. 415534 AVN NO. 1Y6095A OAH NO. LCB NO. DECLARATION OF SERVICE BY MAIL I certify that I caused a copy of the FINAL ORDER OF THE BOARD in the above- referenced matter to be served on all parties or their counsel of record by US Mail Postage Prepaid via Consolidated Mail Service for applicants and licensees, by electronic mail for of?ces, and Campus Mail-Via Consolidated Mail Services for state Of?ces on the date below to: EMILY GRANT AND ANDREW ALEY ATTORNEYS FOR LICENSEE GARVEY SCHUBERT BARER 1191 2ND AVE STE 1800 SEATTLE, WA 98101-2996 OFFICE OF THE ATTORNEY GENERAL MAIL STOP 40100, GCE DIVISION ARYNA ANDERSON, ASSISTANT ATTORNEY GENERAL KEN JONES HL SOUTH, LLC d/bfa VELA 18844 SE 42ND ST ISSAQUAH, WA 98027?9366 HL SOUTH, LLC dfbx?a THEOREM afk/a VELA 1944 1ST STREET, #100 SEATTLE, WA 98101 DATED this ;3 Lday of/ A 11C ,2 17, at Olympia, Washington. Kevip Adjudicative\ Proceedings Coordinator