I too would say: denied applicant 1.
He sought out information he claims from a federal employee to deliberately deceive. However, he may get a break based on age and MJ being expected in that time frame. In the undisclosed period he was susceptible to blackmail. Obviously his references dimed him out without a problem.
Declined applicant 2: Candor is a hard one to defend. Putting it in writing where you deny its use…propensity to not follow the rules. At a minimum be required to sign an acknowledgement regarding candor and drug use, but I think it would be a no go on candor.