It’s early evening in a bar, and a tattooed hipster pulls out a thin, white cylindrical object and puts it to his lips. The tip glows red as he inhales, and when he exhales a cloud of what looks like smoke comes out of his mouth and nose.

“Banana cream pie flavour!” he exclaims. “Want to try?”

It’s an e-cigarette, touted as the safe, healthy, smoke-free way for smokers to get their fix — indoors or out. You might have passed them off as a novelty, but health organisations and governments are suddenly scrambling to research and regulate electronic cigarettes.

Despite a relatively small market value — currently estimated at $2 billion globally, compared with the juggernaut $800 billion worldwide tobacco industry — e-cigarettes have grown rapidly in popularity over the past five years. Worldwide sales are expected to top $10 billion by 2017, and Big Tobacco is hastily investing in the fledgling industry.

Depending on who you ask, e-cigarettes are either a golden ticket to going cold turkey on the fags, or an untested and dangerous alternative with no proven benefits, likely to ensnare a new generation of nicotine addicts.

How do they work?

E-cigarettes generally have three elements: the cartridge, the battery and the heating or vapourising chamber. Interchangeable cartridges carry a liquid solution, which is turned into vapour with every puff by the heating or vapourising element.

An e-cigarette is not a smoking alternative per se. If you wanted, you could fill the cartridge with water or apple juice. Most canisters contain a sugar-based chemical such as propylene glycol mixed with water and flavouring. It’s the option of including pre-mixed nicotine, or adding it to the solution yourself, that makes e-cigs potentially dangerous.

Are they safe?

The jury is still out on the health science behind e-cigarettes. On the one hand, they are proven to contain far less than the average 4000 chemicals inhaled with cigarette smoke, and advocates say the lack of second-hand smoke is a big drawcard. On the other hand, the product still delivers nicotine, in potentially unregulated doses, and there isn’t much science yet to prove vapour is safer than smoke.

In theory, since it doesn’t burn tobacco, vaping should be safer than smoking. However, Anne Jones, CEO of Action on Smoking and Health Australia, isn’t ready to call it a safe alternative. “People are taking a real risk if they start thinking they can just pick up an unregulated product and ingest it into their lungs on a regular basis. To do that is just such a risky activity when we’ve got no clear understanding yet of the safety and efficacy of e-cigarettes.”

 The closest thing Australia has to a policy position on e-cigarettes is a statement from the Therapeutic Goods Administration, a branch of the federal Department of Health. The one-page statement includes a broad warning against unregistered products and the risks of counterfeit, contaminated or expired liquid solutions.

An ongoing study at the University of Queensland with 1600 participants is testing the use of e-cigarettes as a quitting tool, with results due out in 2015.

Can you light up an e-cigarette anywhere?

It’s not clear. In the absence of action by governments in Australia, users are able to “smoke” e-cigarettes anywhere. A few novelty cases have been through the local court systems, but there’s no legal precedent.

Advocates argue that since the vapour dissipates almost immediately, non-smokers have no reason to be offended. There’s no lingering smell, and no hazy cloud of smoke hanging to the ceiling. No research has yet proven that second-hand nicotine vapour is harmful. Then again, no research has disproved it.

The UK is perhaps most advanced in regulating when and how e-cigs can be used. A world-first “vaping zone” has just been created at Heathrow airport.

So is it legal?

This is where it gets tricky. In Australia, the e-cigarettes themselves are not illegal — as a tobacco-free product, they don’t fall within the scope of legislation. Online retailers are flourishing, and stores have even popped up where users can buy the devices, tanks, e-liquids and other paraphernalia.

There’s disparity between the states. According to Anne Jones: “We have a huge gap in the rules and regulations in Australia on e-cigarettes. We’ve got a position statement from the TGA and that’s about it … A manufacturer would normally apply to the TGA for the sale of a product, but all the people marketing e-cigarettes in Australia are just skipping that process, and the government basically hasn’t taken any action.”

Western Australia is perhaps best positioned to outlaw e-cigs if necessary. Section 106 of the Tobacco Products Control Act 2006 makes it illegal for anything to resemble a tobacco product.

For the rest of the country, it’s the nicotine that makes e-cigarettes quasi-illegal. The TGA classifies it as a “dangerous poison”, and without a licence e-cigarette manufacturers in Australia are restricted to selling non-nicotine products. However, users can import up to a three-month personal supply from overseas under the TGA’s Personal Importation Scheme. A wide range of international websites offer nicotine canisters of varying strengths, with direct shipping to Australia.

What happens now?

Jones says the government needs to act quickly to regulate the market. She points to the European trend, where advertising urges former smokers to “come back” to a “safe” product, as well as subtly targeting a new generation of young nicotine addicts.

“A lot of the tactics that were used by the tobacco industry are now being used by the promoters of e-cigarettes … Without regulation there’s no guarantee about the quality or safety, and even though there’s a sort of hope that these will be helpful for weaning smokers off the more harmful tobacco products, we’re basically looking at the moment at yet another unregulated product which claims to be safe, but there’s simply not enough scientific evidence to prove that is the case.”