There are no universal definitions of "food grade" or "cooking pellets" or anything else pellet-wise. Manufacturers of pellets are on their own with regard to what they will use for a pellet intended for use in a pellet cooker. The four things you certainly don't want in a "cooking" pellet are finishes (varnish, paint, etc.), adhesives (glue and binders), preservatives (oils, insecticides), and resinous softwoods (pine, fir). Heating pellets just need to burn and make heat. Their gasses are vented out and don't wind up in anyone's food.
With the increasing popularity of pellet cookery will come, eventually, government regulation and inspection of the pellet manufacturing business. I won't make any political comments on that.
Today, the best way to assure oneself of good quality and pure ingredients is to purchase pellets from an established manufacturing organization with a large committment to pellet cookery. I don't pretend to know them all but right now I buy with confidence from Cookingpellets.com, Barbequer's Delight, Bear Mountain, Fast Eddy, Lumberjack and BBQ Select. I have researched their methods and practices (in a "prior life") and have some level of confidence that they will produce a quality product. Other pellet users may chime in with their favorites.
Traeger dealers are dropping out of the network very quickly as that company has moved to direct sales and circumvention of the dealer. Most didn't know much about pellet cooking, anyway. Thus, dealers may turn to cheap sources of supply of a product they don't know much about in the first place.
Be careful. Caveat Emptor