No issues that I can think of.
Although if I may comment, I think you'd be better off going the direct fire route. With a generator, you're taking a fossil fuel, burning it (making heat), and converting it to mechanical energy (all at ~30% efficiency). This mechanical energy is converted to electrical by the generator (at ~80% efficiency). The electrical energy is then used to power your heat sticks (at close to 100% efficiency).
You've released a ton of energy (heat) in the engine, converted it to mechanical then electrical energy, and then you're heating water with it. It'd make more sense to "skip the middle man" and just directly heat your water. Use propane or (better yet) natural gas here, not gasoline. This is the same reason why it's generally cheaper to heat water and your house with nat gas vs. electric.