For the past few years, marijuana retailers Higher Leaf and Green-Theory have shared much in common aside from the products they sell.
Both were pioneer Eastside retailers, with Green-Theory opening the first recreational marijuana store in Bellevue in 2014, and Higher Leaf opening the first of its kind in Kirkland in 2015.
Both companies expanded their operations on the Eastside last year: Higher Leaf opened a second location in Bellevue’s Eastgate neighborhood, while Green-Theory opened a second location in Bellevue’s Spring District.
And both businesses are among some of the most profitable recreational marijuana retailers on the Eastside.
Now, the two companies are more closely associated than ever following an announcement this week that Higher Leaf has acquired Green-Theory for an undisclosed sum.
Business acquisitions like this one are rare, according to Green-Theory regional marketing manager Rachel Emadi, due to strict rules laid out by the Washington State Liquor and Cannabis Board.
“Owners and potential buyers of all cannabis businesses must be in-state residents, and all funding must come from potential owners’ own sources,” Emadi explained. “Investors from other states or countries are prohibited from investing or having an ownership interest. Financing for potential buyers can also be complicated as banks won’t provide business loans.”
Higher Leaf owner Molly Honig owns both Higher Leaf stores, Emadi noted, and Honig’s new business partner is a longtime Washingtonian.
According to 502data.com, which tracks legalized marijuana industry sales statewide, Higher Leaf has generated $26.4 million in sales and $9.7 million in state excise tax at both locations combined through October 2018. Green-Theory has generated $9.6 million in sales and $3.5 million in state excise tax at both locations through October 2018.
For now, there are no plans for Green-Theory stores to rebrand as Higher Leaf stores, added Emadi. Together, both companies employ upwards of 70 people.
Higher Leaf owner Molly Honig said she looked forward to getting to know the new teams of both Green-Theory stores, as well as merging the best processes from both companies, which “are already popular and vibrant stores.” On the customer side, Emadi and Honig said the merger should allow for greater efficiencies and savings for shoppers.
And expect to see more store acquisitions and consolidations such as the one between Higher Leaf and Green-Theory, according to Emadi.
“The state recently increased the maximum number of licenses that one person can own from three to five,” she said. “The state Legislature is considering further increases to the limit. If approved, we’ll start to see even more consolidation with a small number of chains controlling an increasing market share.”