3.5x SDE is NOT a good price for a small, low/no growth business with a high working capital requirement / poor cash conversion cycle and a massively underinvested fixed asset base.
Asking employees to stop smoking (inside) is a high ask. Smoking is combination of addiction + habit. It would be hard for anyone to break regardless of being employee or not.
Its not a high ask. Go outside to smoke. He did not ask them to quit smoking. Furthermore, it is his capital at risk not that of the minority of people whom are smokers.