"Would the fail be because of 2nd hand smoke or can it get in to his system from handling it?"

No.
Handling and second hand smoke are not the problem here.

It's the nature of a hair test.
Think about it.
Hair grows quite slowly.
So a hair test is not testing for recent use, it's testing for any use going back a long time.
Depending on how heavy the use was, and how long the hair is, the hair will test dirty after many months of zero use.
If the hair test wasn't more expensive than the urine test, all employers would use it.

A urine test, is for recent use.
Abstinence for 4 to 6 weeks will have most people testing clean.

Hope that answers your question.

Aloha,
Weezard