The two largest marijuana retailers on the Eastside, Higher Leaf and Green Theory, have announced an official merger.
Higher Leaf owner Molly Honig recently closed on the purchase of the two Green Theory locations in November.
Green Theory opened in 2014 and was the first marijuana retailer in the city of Bellevue. Initially located on Main Street in downtown Bellevue, Green Theory eventually moved to a new location in Factoria and opened a second store in the Bel-Red area. Higher Leaf opened its first location in Kirkland in 2015 and has since opened a second location in Bellevue’s Eastgate area.
Honig, owner and founder of Higher Leaf, said the cannabis industry is moving toward consolidation of licenses and in order to remain competitive as an industry leader, the business needed to grow. Because Green Theory is located in Bellevue, it made the decision to acquire the business much easier since operations would be much more convenient to manage.
Becoming a larger company will also allow the business to scale up some efficiencies in their operation costs, advertising and management, which can allow Honig and her team to work on passing some of the savings back to the customer.
Green Theory will not re-brand at first, she said. Honig wants to maintain consistent brands and relationships with their customers. There are some differences in the products each store offers and those unique elements will remain.
Negotiation processes started up six months ago, Honig said, and state approval of the purchase was a lengthy and intense process as well. Ownership transfer was approved by the state on Nov. 29.
The team of employees has also grown to about 75 people, she said. While there has been some shifting in titles for consistency in the back-end, realigning all of the operations has been moving slowly and deliberately. Honig said she is looking forward to 2019, during which efforts to create a consistent employment experience for all 75 employees will continue.
In a press release, the acquisition of Green Theory is described as the possibly the single largest purchase of a recreational cannabis business in the state. These types of acquisitions are uncommon, Honig said, because of restrictions from the Washington State Liquor and Cannabis regarding how many licenses one owner can have. The state has increased the total number of licenses that one can own from three to five and are considering further increases.
The state also prohibits investment and funding from out of state as well. Honig believes that as federal legalization comes closer to becoming a reality, out of state funding would be one of the next steps, which would lead to major consolidations of brands and stores.