Monday, September 8, 2014

CVS Stockholders Beware (But Maybe Not?)

I think we can all agree that smoking can have pretty devastating outcomes on your health. Odds are you know of somebody that's been destroyed by their choices with tobacco.

I see it all the time. I work in a cardiopulmonary rehab center. Patients come in every day hooked up to oxygen tanks, barely able to walk across the room without stopping to catch their breath.

Tobacco kills. 

But nevertheless, it's here to stay. Why? Well, first, because it's addictive. And second, there's good money to be made off of tobacco. I know of people with engineering degrees who went into tobacco farming. Why? Because you can pull in somewhere around $1500/acre (1).  And if you own a 50 (pretty average) acre farm that's nothing but tobacco planted throughout, you can net somewhere in the neighborhood of $75,000/year.

That's pretty stinkin' good.

Farming tobacco brings in big money because tobacco products bring in big money. The tobacco industry is somewhere around $35 billion (2). You can make good money selling this stuff.

And that's why I find CVS's decision so surprising. 

CVS, your local drugstore, has decided to pull all tobacco products from its shelves, forgoing around $2 billion dollars in annual sales. That's amazing. I don't even know what to make of this.

The hope is that by getting rid of all tobacco products, other corner drugstores will follow suit leading to a much healthier America. Conscious driven customers will hopefully respect CVS's decision and shop their more as well.

What's going to happen is completely up in the air, but I personally applaud CVS for taking such a huge step to forgo the sales of a product not in line with its mission. We'll see what happens.

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