A Civil Aviation official says an investigation by the organisation following a fatal balloon crash in Wairarapa in 2012 did not consider evidence of cannabis found in the pilot's body.
The Wellington Coroner's Court is investigating events surrounding the crash, near Carterton, which killed all 11 people on board.
Blood and urine tests from the pilot, Lance Hopping, revealed the presence of THC, the active ingredient in cannabis.
However, Civil Aviation Authority general manager Chris Ford told the court on Wednesday that its health and safety investigation investigation of the crash didn't look at Mr Hopping's cannabis use because it knew that would be covered by the Transport Accident Investigation Commission's report.
Mr Ford said the CAA's focus was on what could be learnt from the crash and used to prevent future crashes. He denied that the CAA didn't consider the drug issue because that might have raised issues about its handling of earlier alerts relating to drug use by Mr Hopping.
On Tuesday, Mr Ford admitted that the organisation took no action over several complaints about Mr Hopping and didn't investigate him until two months after the fatal crash.
The inquest was told on Wednesday that material used in hot-air balloon manufacture is not something Mr Ford's organisation has any control over. He said balloons used in New Zealand were made overseas and had to meet British or European manufacturing standards.
However, in reply to a question from Grant Burston, the lawyer assisting the Coroner, Mr Ford said the CAA could speak to the manufacturers.
He said he understood the victims' families concern about the quality of material used in the balloons.