CVS Pharmacy is taking the bold move to no longer sell tobacco cigarettes at its 7,600 locations nationwide. This move will go into action in October of 2014 and will make way for E-cigs to take control of the CVS market. This means that CVS is staking high claim in the vape or E-cig market and looking to become the biggest retailer of the alternative to tobacco. After formally announcing this direction, CVS was widely recognized for making an impactful health decision that could offer wide ranging benefits.
Even President Obama made his opinion heard about CVS’s new plans with tobacco. He stated that CVS will be a “powerful example” and that this retailer is moving in a direction that will bring more attention to the negative health effects of tobacco. CVS is simply acting as the first to remove tobacco from the lives of its customers.
When you take a deeper look at the decision that CVS made to get rid of tobacco, you see a bold move. CVS profited about 2 billion dollars from tobacco just last year. It might lead you to believe that this is a risky business move that could have a negative impact on the profitability of CVS. However, this health conscious move is really quite business savvy. So before you get ready to sell your CVS stock, you should look at the bigger picture.
The Tobacco Replacement
CVS is in business to make money and turn a profit, so they would not move out tobacco without a replacement ready to go. E-cigs are the tobacco alternative of choice and the replacement that CVS has in mind to bring in revenue lost by the move out of tobacco. CVS has not officially stated their partnership with E-cigs, but all signs point in that direction. This is due to the fact the FDA regulations of E-cigs will quickly becoming down. These FDA regulations will have a huge impact on how retailers can sell these products.
FDA Regulations and CVS
However, due to CVS’s plans to move forward with the tobacco move out, they have expectations the FDA regulations will be minimal. In the next few months the complete FDA regulations should be released and CVS will have the ability to be more vocal about their strategy. Retail stores selling E-cig products will increase the profile of this new industry.