necesse is a predicate that takes a subject clause. We tend to render these subject clauses in English either as a "that-clause" like indirect discourse [that the possessor is happy] or as a gerund phrase [the possessor being happy].
The subject is "qui potiatur sit beatus."
All of this is in a relative clause introduced by quo, which is correlative with id.
That thing alone is good, by virtue of which (quo) it is inevitable (necesse est) that the one who possesses it is happy (qui potiatur sit beatus).
Or:
That thing alone is good, by virtue of which (quo) the one possessing it being happy (qui potiatur sit beatus) is inevitable (necesse est).