On 16 April of 1902, after 2½ unprofitable years, Grathwohl sold out to a group of Bellingham businessmen for $20,000. He then relocated to Oroville, WA, where he established the Oroville Brewing Co.

The new owners consisted of the brewery's superintendent, Stanislaus T. Zynda, plus liquor dealers, who had control of ten area saloons. It appears that Zynda was an agent for Leopold Schmidt who was orchestrating this takeover. His behind the scene maneuvers sought to eliminate local competition, and to secure ten outlets, or "tied-houses" for sole distribution of his beer.

Two months later, in June '02, Zynda travels to Salem, OR and purchases the city's Capital Brewery & Ice Works for $75,000. The following month the brewery is incorporated as the Salem Brewery Assn., with L. F. Schmidt, pres., and S. T.  Zynda, secretary and manager.
 
The WB&G, under Schmidt's direction, invested in improvements and initiated an aggressive advertising campaign. It was now at full capacity and enjoying an increased demand for its product.

On January 13, 1903 Schmidt went public with his takeover, and after only nine months, the revitalized Whatcom Brewery was absorbed by 3-B for $50,000. A number of stockholders took stock in 3-B for part of their pre-arranged buyout.

The brewery's ice works and cold storage continued to be used, but beer production ceased with 3-B Beer remaining the sole product of the combined businesses.

In 1925 the old brewery was sold and the structure later burned. It was located at 2103 Iowa St., now part of auto row.

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