Don't overthink this. I've seen pep-mills made of dozens of different woods. Generally, most commercially available species will work as long as you consider the wood's stability. The more stable the wood, the closer the tolerances between the barrel and tenon can be cut. Domestically, Cherry, Walnut and Maple will all work well for a mill. If an exotic wood is to your liking, Cocobolo is tough to beat. I have made several hundred mills out of Coco and it is by far my favorite for durability and stability. I have also used Kingwood, Camphor Burl, Afzelia Burl, Granadillo, Bloodwood, African Blackwood, Amboyna Burl, Ebony, Padauk, Purpleheart and dozens more with great results.
The only wood I avoid is Olive. It is very unstable and this will cause problems with the tenon being able to rotate within the barrel.
If you are worried about some sort of toxic absorbtion, use some type of food-safe finish on the inside of the pep-mill.