This News Could Burn E-Cigarette Makers

By Markets Fool.com

The list of benefits from e-cigarettes, compared to regular tobacco, might be most notable for what it doesn't include. Blu, aLorillard product and the nation's most popular brand, cites five reasons to switch: price savings, more flavors, no smoke smell, wide availability, and the ability to use them in public places where smoking is prohibited. Notably absent from the list is any mention of health effects. Another e-cig brand, EverSmoke, notes health as an advantage of e-cigarettes on its website, but then says, "While we can't make the claim that e-cigarettes are healthier, we can point out how traditional cigarettes are harmful to your health."

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Source: Blu website.

Well, a new study could generate problems for the e-cigarette industry. Researchers in Japan have just found that some e-cigarettes are 10 times as carcinogenic as regular cigarettes. The study, which did not name brands and indicated that results varied, said some brands included the carcinogens formaldehyde and acetaldehyde, which become more toxic at high heat.And since e-cigarettes work by heating up a small amount of liquid that contains nicotine to produce a vapor the user inhales, the results underscore a huge risk to the burgeoning e-cigarette industry.

More health concerns
Several scientists have claimed that e-cigarettes, in general, are much less toxic than regular cigarettes, but the World Health Organization earlier this year released a report urging regulators to take stricter positions against the new form of smoking. Douglas Bettcher, a WHO director, insisted that because so little is known about the health effects of e-cigarettes, "the onusof responsibility for showing safety, for answering many of these questions, must be on the companies and the industries owning them."The international body also expressed concern about big tobacco's entry into the market,and urged the banning of e-cig vending machines and sales to minors, along with forbidding companies from making health claims or saying e-cigarettes can be used as a way to quit smoking.

Are more regulations on the way?
Most states have already banned e-cigarette sales to minors, and several legislators have called for intensified regulations against e-cigarettes. In an October letter tothe Food and Drug Administration, six U.S. senators urged the agencyto "adopt aggressive warning labels" about the health risks of e-cigarettes.The FDA has yet to institute comprehensive regulation on the product, though a proposed rule would affect e-cigs much in the way of cigarettes. It would mandate disclosure of all ingredients, require an FDA review for new products, and have minimum age and warning requirements.

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What does it mean for the manufacturers?
Some experts have defended e-cigarettes, which they see as a less pernicious form of tobacco use. The question over whether they provide a path away from or to tobacco use is the most intensely debated subject around e-cigarettes.

For now, the absence of hard data about the long-term effects of e-cigarettes, which will take years to study, means fewer regulations for manufacturers and is a boon to the industry.There are now over 466 e-cig manufacturers, and big tobacco's recent interest shows how much the industry is growing. Some researchers expect e-cig sales in the U.S. to pass those of regular cigarettes by 2020, and research firm Research and Markets projects a 24.2% compound annual growth rate for the next five years.

Of course, the new discovery of toxic health effects could change that growth outlook, but that appears unlikely at the moment, as further studies are necessary. Japanese officials have announced another study to follow up on the report that found higher than expected levels of carcinogens to determine if and how e-cigarettes should be regulated. For now, e-cigarette makers still seem to have the wind at their backs.

The article This News Could Burn E-Cigarette Makers originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.