Best way to evict brand-new roommate in house hack situation?

[JP Desmet]

I house hack my primary residence; and last week a new tenant moved in. This morning I went into their room after they left to look at installing a window AC for them. To my shock, the room was full of smoke/nicotine aroma. 

The bottom image shows the vape pen/e cigarette that was on the window sill.

I texted the tenant, who denied everything and insisted that he never vaped or smoked in the room. This was clearly not the case; I brought in the other two tenants, who both confirmed someone had obviously been vaping in the room. Actually, all three of us were surprised that such an aroma could be caused simply by vaping - it very much seemed like smoking, but I'm not experienced enough to confirm either way.

The lease that he is on is month-to-month. He paid me $300 damage deposit and $700 rent. I see two options:

1) Ask him to leave immediately, and refund his rent for the rest of the month

2) Allow him to stay for the month he has paid for, but inform him I will not be renewing and he has to be out Sept. 1. 

I'd rather do #2, but I also don't know the extent of the damage vaping could potentially be causing; as well as the risk he actually did use a cigarette. But I'm uncertain about the legality of #1. Because it is a house hack, it is a lot easier physically for me to kick him out than it might otherwise be, obviously. But I'm not sure if technically I can do it, without going to a judge or whatever. Thoughts?