Cigarettes may not be a growth industry as the number of users drops every year, but the U.S. electronic cigarette market continues to be a red-hot opportunity. The vapor industry is expected to hit $5.5 billion in sales this year, a 7.8% upward revision from just a few weeks ago, when Wells Fargo forecast e-cigs would achieve $5.1 billion.

The main reason for their continued popularity is that research has suggested they are a safer alternative to smoking a traditional cigarette. For example, the U.K.'s Public Health England published an expert independent evidence review that concluded e-cigs were around 95% less harmful than smoking, they have the potential to help smokers quit smoking, and there is no evidence so far that e-cigs serve as a gateway to smoking for children or non-smokers.

With the Centers for Disease Control and Prevention estimating 36.5 million U.S. adults currently smoke cigarettes and nearly 70% of them saying they want to quit, there is a large market for the e-cig industry to tap into.

But what if electronic cigarettes weren't as safe as they've been touted to be?

Electronic cigarette e-liquid bottles

Image source: Getty Images.

E-cigs: doing more harm than good?

According to a just-released study by Johns Hopkins Bloomberg School of Public Health, daily users of electronic cigarettes may be exposed to toxic heavy metals that are leaking into the e-liquids used by the devices.

The results of the study that was published in the peer-reviewed journal Environmental Health Perspectives found that e-liquid refills from 56 Baltimore-area daily e-cig users contained significant levels of arsenic, chromium, manganese, nickel, and lead that exceeded current recommended limits in half or more of the samples.

Because markedly higher concentrations of the toxic metals were found in the aerosol and tank samples taken versus the amounts in the actual e-liquid dispenser, the researchers surmise it is the e-cig's heating coil coming in contact with the e-liquid that is causing the contamination.

This seems to contradict the results of a study conducted last year by a team of scientists at Lincoln Memorial University that tested for trace metals in the smoke produced by Marlboro cigarettes to the vapor produced by e-liquids. Its results found the metals to be virtually non-existent.

While it cautioned its study was focused on one particular device using a particular e-liquid concentration, it ultimately concluded, "it is unlikely that the ECIG-generated aerosol contains enough of the other trace metals to induce significant pathology."

Many using an e-cig mod

Image source: Getty Images.

The federal government creates uncertainty

The latest study holds significant implications for the tobacco industry because all of the major players are making a concerted effort to embrace electronic cigarettes as the future. British American Tobacco (NYSEMKT: BTI) is in the forefront of this movement as it has arguably been involved the longest through its Reynolds American division, which years ago introduced e-cigs to the market, though they were ahead of their time and never caught on. It wasn't until Lorillard's blu eCig brand, which was eventually sold to Imperial Brands as part of Reynolds acquisition of its rival, that e-cigs gained market acceptance.

blu has since fallen by the wayside as Reynolds' own Vuse e-cig came to market, and then devices from Juul Labs and Altria (NYSE:MO) followed suit and gained significant market share. Today the JUUL device owns around 40% of the market, followed by Vuse at 26%, and Altria's MarkTen brand with a 13% share.

Although the latest findings seem to implicate mostly users of so-called mods, or e-cig devices that come with greater e-liquid capacity and longer use times, but require the user to maintain the heating coils and refill the liquids manually, it could create an environment that casts a pall over the industry.

Moreover, Wells Fargo finds that although the e-cig market as a whole is growing, the mods segment is outstripping it. In 2014, industry sales totaled $2.5 billion, with e-cigs accounting for $1.4 billion, and mods and e-liquids comprising the remaining $1.1 billion. Last year, though, e-cigs still represented $1.4 billion of the industry's total, but mods and e-liquids sales had surged to $3 billion. And Wells Fargo estimates e-cig sales will widen to $2 billion in 2018, but mods and e-liquids will hit $3.5 billion.

Avail Vapor e-cig store

Image source: Avail Vapor.

Altria, though, could face added risk as it recently acquired a minority interest in Avail Vapor, one of the biggest chains of vape shops, but also a manufacturer of e-liquids.

The FDA has given conflicting signals about how it feels about electronic cigarettes, and it's currently considering an application by Philip Morris International (NYSE:PM) to market the next generation of e-cigs that heat tobacco to the point of creating a vapor and delivering a nicotine hit rather than relying upon e-liquids. While it's still not known whether it will earn a reduced-risk label if approved for sale, it could be a big beneficiary of any negative health findings associated with competing electronic cigarettes.

Because electronic cigarettes are comparatively new to the market, and there are no studies yet on the long-term health benefits or risks associated with their use, we're likely to see more studies in the future that conflict with existing data, which should further fog the debate over e-cig regulation.

Editor's note: This article has been corrected to note that Altria has a minority stake in Avail Vapor.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.