Hashtag, a Seattle pot store, has an outside wall brightly decorated by the muralist known as Henry, the city’s most prolific painter of playful, slightly psychedelic scenes.

A state Liquor and Cannabis Board officer slapped Hashtag with a violation notice in September, saying the mural and its orange walrus frolicking with a green narwhal were “appealing to children because it has cartoon characters.”

The mural itself has no images or references to marijuana or the store. So Hashtag owners appealed, saying it was allowable art, not a sign. The case has been awaiting a hearing with a judge, at which Hashtag’s lawyer would square off against an assistant attorney general.

This week the LCB reversed itself — after inquiries by The Seattle Times — and dropped its complaint. “After an inside review of the mural on Hashtag, our enforcement team concluded that the mural is not advertising, therefore allowed,” said agency spokesman Brian Smith in an email Tuesday.

That decision illustrates the challenges of LCB officers not only in discerning art from advertising, but in determining whether some art appeals to kids like a pied piper of pot.

Hashtag co-owner Logan Bowers said the state’s “might be appealing to kids” standard is “dangerously vague.”

Hashtag commissioned the mural, Bowers said, and Henry let him see a sketch before he painted it. “But we didn’t exert any creative control,” Bowers said. “It never occurred to us that it might run afoul of the rules because we never considered it advertising.”

State Sen. Reuven Carlyle, D-Seattle, pushed for tighter regulation of pot advertising after he got tired of seeing a “Got Weed?” billboard as he crossed the Ballard Bridge daily. Such signs, visible to school buses, are not what he envisioned under Washington’s strict legal-pot regulations.

After being asked about Hashtag’s mural this week, Carlyle said he drove by the store on Stone Way North near Lake Union.

“In the big picture it’s vital that LCB is vigilant and relatively strict about interpretation of advertising appealing to children,” Carlyle said in an email. “But I also freely admit I’m deeply uncomfortable with this one because Henry is culturally relevant art that goes to the soul of our community.”

Ballard artist Ryan Henry Ward has painted more than 180 murals, often with fantastical creatures, on building exteriors, school interiors, garages and even vehicles, primarily in Ballard, according to his website. He describes his “whimsical work” as “primitive images with a dreamlike, surreal quality.”

It wouldn’t be surprising if his Yellow Submarine-esque characters had some appeal to children. And the LCB’s Smith said Hashtag was hit with a violation after someone complained about the mural.

“I can absolutely see both sides” of the argument, Carlyle said. “I’ve got four kids. We all want to be responsible.”

But Carlyle noted that Hashtag’s “signage is small” and it’s hard to tell from the street that it’s even a pot store. “It’s like freedom of speech,” he said of its mural. “You have to err on the side of art.”

Bowers said the store purposefully avoided anything commercial in the mural, “as its purpose is beautification” of what he called a rundown building.

He noted that Henry painted a mural on the side of a bar that depicts two walruses holding beers and it has been uncontroversial. It’s flimsy logic, he said, to ban images that might appeal to kids. “Is a child going to walk by, see a fish on the side of a building and then conclude he’s going to smoke marijuana? Do children pound hard liquor if the grocery store looks too nice?”

The Hashtag violation follows stricter advertising regulations mandated by the state Legislature. The new rules took effect in July. They don’t allow stores to have sign-spinners, inflatable advertising, signs that depict marijuana or a store’s products, or signs with movie or cartoon images that appeal to children.

“Several stores will need to revise their signs,” Smith said.

Advertising rules are the most commonly violated, according to Smith. The LCB has issued 178 such warnings or violation notices since 2015, with 32 of those coming since the new rules took effect in July.

An LCB official has contacted Hashtag’s owners to let them know “we would be rescinding the violation notice,” Smith said, and the attorney general’s office would follow up in writing.

“I’m pleased they dropped the violation,” Bowers said, “as I think it’s obvious that artwork should not be censored or regulated by the LCB or any state agency.”