How much theory I teach my students depends alot on their individual personality, and their level of commitment and of course practice. All my students I at least try to get them to learn to name all the notes on the fretboard, starting first with only the natural notes, and then adding in the flats and sharps. They all learn basic reading, though some progress very fast, and some very slow. For example, I have had students for over a year and they have barely done 3-4 strings. And then I have some very dedicated and smart students who practically finish the book, and all six strings in a few months.

Usually the order that I teach them theory in goes something like this:
1. naming notes on fretboard
2. intervals ---understanding how they work, and also memorizing how to play them on the guitar
3. circle of fifths --- once they understand intervals they are ready to learn the circle of fifths. I try to get them to learn how to draw a circle of fifths from memory, and then later I push them to learn how to "draw the circle in their imagination".
4. I teach them how to use the circle of fifths to determine all the notes in a given key (the key signature), and all of the basic triads in a given key.
by this point, they also should already know or be working on the 5 basic positions/patterns of the major scale.
5. I try to give them assignments like create 5 different chord progressions in 5 different keys, etc...and then solo over it with the appropriate scale, in at least 2 different positions, or even better all 5 positions.
6. Arpeggios.
7. I might teach them things like cadences, phrase construction, to help them tighten up their composition or improvising efforts.
8. miscellaneous things like extended harmony, modulation, different scales.

Generally no 7 or 8 is the farthest I have gotten with any students so far. And some students simply are not ready for any serious theory. Some eat it up like candy. You have to judge who is and when they are ready for it. And the bottom line is, the most important thing is the end result. I don't care if a student of mine knows all or none of theory in the world, they have to be able to play the guitar --- that is your primary job as a guitar teacher. Anybody can learn to play guitar, but only a few people will even try to learn to be a musician....