• Infant formula blackmailer Jeremy Kerr admits drug charges
• He was convicted a decade ago over hydroponics cannabis operation
• His threat is estimated to have cost the country $37 million

The man who was jailed for threatening to spike infant formula with 1080 was on bail on drug charges when he sent blackmail letters to Fonterra and Federated Farmers.

Jeremy Hamish Kerr, 60, has today pleaded guilty to charges of possessing and selling Benzylpiperazine (BZP), a psychoactive substance found in party pills.

The Herald can now also reveal that in 2004 Kerr was convicted on charges arising from an elaborate hydroponics cannabis operation concealed in a rented East Tamaki warehouse.

In March, he was sentenced to eight and a half years after admitting two counts of blackmail.

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He is now looking at an extra stint added to that prison term after pleading guilty to five charges in the High Court at Auckland this morning.

The existence of charges, which came about as part of a large-scale police operation, had been suppressed to preserve Kerr's fair trial rights.

Today he admitted four counts of possessing class-C pills for the purpose of supply and one of selling a class-C drug.

Those pills contained Benzylpiperazine (BZP), a psychoactive substance found in party pills and other chemicals.

The offending took place between September and November 2011.

In 2004 police found a hydroponics cannabis operation of 450 plants with an estimated street value of $150,000 hidden inside premises he also used for his pest control business. The plants were inside shipping containers equipped with extraction fans, ultra-violet lighting and watering systems.

Most of the factory was boarded off to conceal the cannabis operation, police said at the time.

Kerr's blackmail case was called "near the most serious case of its kind" by Chief High Court judge Justice Geoffrey Venning, after the court heard it cost the country more than $37 million.

In November 2014, Kerr mixed highly concentrated amounts of the poison with baby milk formula and posted them to the dairy co-op and to Federated Farmers, with a letter demanding the country stop using 1080 or he would release poisoned infant milk powder into the Chinese market and one unspecified market.

Kerr initially denied involvement when interviewed by police but later confessed when DNA evidence proved he had written the threat letters.

The 60-year-old denied his actions were financially motivated but Justice Venning disagreed.

Kerr owned a rival pesticide called Feratox, for which he received annual royalties of more than $100,000.

If 1080 had been taken off the market, it is likely use of his product would have increased, the court heard.

Kerr will be sentenced on July 8.