A federally licensed medical-marijuana company recently caught selling cannabis that contained a banned pesticide had used the dangerous chemical on its plants as far back as 2014, which it hid from Health Canada, says a former employee of Mettrum Ltd.

Thomas McConville, who worked as a grower at Mettrum from early 2014 to August, 2015, told The Globe and Mail he witnessed employees at the company illegally applying myclobutanil to plants, despite knowing the controversial pesticide – which produces hydrogen cyanide when heated – was prohibited for use on cannabis.

To evade detection when Health Canada inspectors visited the operation, an employee at Mettrum hid the chemical inside the ceiling tiles of the company's offices, Mr. McConville said.

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The revelations raise alarming questions about Health Canada's oversight of the sector, particularly since the government has not required the country's 38 licensed producers to have their products tested for banned pesticides. Instead, the department told The Globe this week that it has allowed the companies to police themselves, on the belief that the penalties for being caught – possible licence forfeiture – were a big enough deterrent.

Faced with a growing controversy over tainted medical marijuana, with three companies in the past two months announcing recalls due to the discovery of myclobutanil in their products, Health Canada said this week it would introduce a new system of random testing for all licensed producers. However, the government stopped short of introducing ongoing mandatory testing to ensure the industry is not flouting the rules, saying it may consider that step in the future.

When Mr. McConville brought his concerns to Mettrum executives in 2014, including chief executive officer Michael Haines, he was told not to worry about it. Fearing for his livelihood, Mr. McConville said he kept quiet. When he left Mettrum the following summer, he was asked to sign a confidentiality agreement in exchange for severance, which he needed to move his family back to California.

However, when Mettrum, the country's second-largest producer of medical marijuana, issued a product recall two months ago, giving no details in its press release about what the reason was, Mr. McConville decided to contact Health Canada with his concerns.

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When The Globe uncovered in December that Mettrum's recall was due to the use of myclobutanil – which neither Health Canada nor the company disclosed in their public announcements of the recall – Mr. McConville decided to speak out about what he witnessed. The product is known as a shortcut within the industry, though it is also notoriously dangerous.

"I walked in mid-spray," Mr. McConville said of the day in 2014 when he confronted the employee applying the chemicals. "I said, 'Seriously, I need to know for this crop what you did. I played it off like 'Don't worry I won't say anything.' And he said, 'It's Nova [the retail name for myclobutanil]. You don't have to worry about mildew.'"

The fungicide is used to control powdery mildew, a pest that can wreak havoc on cannabis crops and cause significant financial loss to companies that are hit by it.

Though the spray is approved for use on some fruits and vegetables, such as grapes, because the chemical components are metabolized by the digestive system, and rendered non-toxic in the body, myclobutanil is not allowed on products that are smoked, such as tobacco and cannabis. The substance is listed as a carcinogen if smoked, where it passes directly into the bloodstream through the lungs, and can emit hydrogen cyanide.

Mr. Haines did not respond to requests for comment on the matter.

The Globe first sought comment from Mr. Haines in December upon learning myclobutanil was the reason for the company's recent recall. A spokeswoman for the company provided only written responses to questions, and did not answer how the banned chemical got into the company's products in 2016.

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Questions sent to Mettrum on Jan. 30 asked Mr. Haines how many times the company had used myclobutanil in the past. The spokeswoman said Mettrum wanted "more context" before answering. Mr. Haines never provided any responses.

Mettrum was recently purchased by Canopy Growth Corp., owner of medical-marijuana producer Tweed, for $430-million in stock. When that deal closed on Jan 31, Mettrum questions were referred to Canopy. A request for comment submitted to Mr. Haines on Wednesday also went unanswered.

Canopy CEO Bruce Linton said he was informed of the forthcoming recall when the company initiated talks on purchasing Mettrum, looking to combine the second-largest player in the market, with Tweed, the largest, to create an industry giant.

Mr. Linton said Mr. Haines is no longer with the company, subsequent to the deal closing, and that his focus will be on installing new practices and oversight so that there are no further recalls.

"It was not a properly controlled and operated environment, but I don't believe that it has any bearing on how the place is run [going forward]," Mr. Linton said. "We'll work pretty hard for the next six to 12 months, making it what we want it to be."

Mr. McConville said he remembers walking into one of the grow rooms at Mettrum on Oct. 15, 2014, during the lunch hour when few employees were typically around. He witnessed two other growers, who were key members of the company, spraying myclobutanil, which is sold under the brands Nova 40 and Eagle 20. Days earlier, the crops had been hit with a powdery mildew infestation.

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"I find it strange that the facility magically went from peak levels of disease to total eradication despite no controls being applied. During lunch today, I discovered why," Mr. McConville said in an e-mail to Mr. Haines that evening, which was obtained by The Globe. "We were spraying Nova 40 on our crops. … There is never a need to resort to spraying toxic chemicals."

Mr. Haines responded to Mr. McConville the next morning saying, "I've read your e-mail. Respect that I can't comment one way or the other at this time."

In an e-mail to Health Canada in December, Mr. McConville said he saw the men "spray Nova 40 to several rooms in the facility," including one he oversaw. "Spraying poison on the crops was the last straw for me," Mr. McConville said.

Mr. McConville told Health Canada that Mr. Haines told him to not worry about it, saying words to the effect of: "The plants used to have mildew and now they don't. That's great." Meanwhile, technicians at the company were told, "only non-toxic 'plant washes' were used on the plants."

On Dec. 9, a few days after sending an e-mail to Health Canada, Mr. McConville spoke with Benoit Séguin, manager of the department's national compliance and enforcement section, who wanted more information.

However, since speaking with Mr. Séguin,Mr. McConville has not heard back from Health Canada. He doesn't believe Mettrum has been upfront about its use of myclobutanil and says further investigation is needed.

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"Thousands of people seeking a safe medicine were [exposed]," Mr. McConville said.

On Wednesday, Health Canada confirmed that it spoke with Mr. McConville, "and brought the allegations to the attention of the licensed producer."

Health Canada said Mettrum conducted its own internal investigation into the matter, and the company reported it found nothing alarming. A department spokesman said Health Canada recently tested stored product samples from 2014, but did not find the banned chemical. Mettrum's recent recall involves myclobutanil discovered in samples from January to November of 2016.

Mettrum is one of three companies to recall product in the past two months due to myclobutanil. OrganiGram issued a similar recall, as did Aurora Cannabis, which discovered the pesticide in a batch of product it purchased wholesale from OrganiGram and resold to customers.

Experts in other jurisdictions say Health Canada's policy of not requiring mandatory product testing is a bad idea, since not all companies are upfront. When Oregon discovered problems with myclobutanil, companies there initially denied it. "Everybody said they were not using pesticides," Rodger Voelker, the lab director at OG Analytical in Oregon, said in an interview last year.

When the federal task force on marijuana, which is advising the Trudeau government on Canada's move to a legalized cannabis market, issued its final report this fall, it called for the government to implement a strong testing regime to ensure the product could be safe and free of harmful chemicals. The report called for testing to be "a cornerstone" of the new industry.

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Several patients who have consumed the tainted marijuana told The Globe this month they were worried about the myclobutanil they have been exposed to, even though they are told it was only a small amount.

In a recent e-mail to its customers, Mettrum said it "commissioned a toxicology report on Myclobutanil from a leading pesticide toxicologist." However, when asked by The Globe last week for more information about the toxicologist, and for a copy of the report, Mr. Haines did not respond.