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Until now, Health Canada hasn’t required testing for banned chemicals in medical-marijuana products.MARIO ANZUONI/Reuters

Health Canada is adding new terms and conditions to the licences of two federally regulated medical-marijuana companies caught with banned chemicals in their products, requiring them to be tested regularly to ensure they are not using dangerous pesticides that can harm consumers.

The new rules are being affixed to the licences of Mettrum Ltd. and OrganiGram Inc., which are caught in the middle of a tainted-marijuana controversy after they were discovered selling product that contained a banned pesticide known as myclobutanil. The chemical, which was discovered in shipments the companies made in 2016, is banned for use on products that are smoked, such as tobacco and cannabis, because it emits hydrogen cyanide when heated.

The Globe and Mail revealed Thursday that Mettrum had been using the dangerous chemical on its plants as far back as 2014, and hid the evidence from Health Canada. According to former employee Thomas McConville, who says he witnessed it being sprayed on plants, the company knew Health Canada wasn't testing its products for banned pesticides, and when federal inspectors visited the facility, a Mettrum employee hid the chemical inside the ceiling tiles of its offices to evade detection.

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As a condition of its licence, Mettrum will now have to submit to regular testing of its products to prove that it is not using myclobutanil and other banned pesticides. The same condition is being applied to OrganiGram, which has sold itself as an organic grower but has since had its organic designation suspended.

"We're adding terms and conditions to both OrganiGram and Mettrum's licence, which will of course require them to adopt that expanded testing regime," a senior Health Canada official told The Globe and Mail in a background briefing this week.

Mandated testing for those two companies is a step up from a plan Health Canada announced this week that will subject all 38 federally regulated companies to random spot checks for banned pesticides.

The department said it hopes the spot checks will serve as a deterrent against companies tempted to use illegal chemicals as an easy but risky shortcut in dealing with mildew infestations.

Companies are required to test regularly for mould and bacteria. However, with only random spot checks required for pesticides such as myclobutanil, a known carcinogen, it is not clear how Canadian consumers can be confident that all medical cannabis producers are free of dangerous pesticides.

Until now, Health Canada didn't require testing for banned chemicals in the product, which is sold as medicine and used by patients with compromised immune systems. Companies within the industry market their products as being clean and safe, and of pharmaceutical quality, but there has been no direct oversight ensuring this is, in fact, the case.

With the federal government preparing to legalize marijuana, The Globe initiated an investigation last summer into what quality controls were being placed on the product, which is expected to be a multibillion-dollar industry.

When The Globe asked Health Canada in August why it didn't test for harmful pesticides – particularly since chemicals such as myclobutanil were a well-known problem in jurisdictions where cannabis is legal, such as Colorado, Oregon and Washington – the department said companies knew not to use them, because they were banned. Health Canada believed the threat of those companies having their licences revoked was enough of a deterrent.

This loophole, and the failure of that oversight, has been further exposed by a recent series of recalls due to myclobutanil, showing the chemical had found its way into the federally regulated supply, which the government touted as safer and more trustworthy than products purchased at illegal storefront dispensaries.

A Globe investigation into contaminants in dispensary products in July showed that a third of the dispensary samples tested would not have met federal health standards due to excessive levels of dangerous mould and bacteria.

Three federally regulated companies have now been the subject of recalls in the past few months. Mettrum announced recalls in November and December, though neither Health Canada nor the company disclosed in their media releases that myclobutanil was to blame. It was only after The Globe questioned the company specifically about myclobutanil that the company and the department acknowledged the banned chemical was the reason.

OrganiGram and Aurora Cannabis then announced recalls a few weeks later, after myclobutanil turned up in shipments OrganiGram sent to customers, and in a bulk shipment of cannabis Aurora purchased from OrganiGram, which it also shipped to customers.

In both the Mettrum and OrganiGram cases, the banned chemical was discovered almost by accident. The myclobutanil in Mettrum's product was only discovered on a second round of tests after evidence of another banned pesticide, pyrethrin, emerged. In OrganiGram's case, the chemical was only detected when Aurora tested the wholesale shipment it purchased from the company.

Customers of the companies have told The Globe they are angry with the firms after consuming a substance they were told was not in the product.

In addition to having new conditions placed on its licence that require regular testing, OrganiGram, which was certified as an organic grower by ECOCERT, has had that designation suspended and must reapply, OrganiGram CEO Denis Arsenault said.

Mettrum, Canada's second-largest medical-marijuana company, was recently purchased by Canopy Growth Corp. in a deal that closed Jan. 31. Canopy said Mettrum's chief executive officer, Michael Haines, is no longer with the company. The Globe sought comment from Mr. Haines several times since December on the use of myclobutanil, but the Mettrum CEO has not responded.