44:90:11:01. Inventory tracking -- Requirements and procedures. A medical cannabis establishment shall use an inventory tracking system prescribed by the department to create all required inventory records, transfer records, testing sample records, and transaction records.

An establishment shall follow these inventory tracking system procedures:

(1) Reconciling all on-premises and in-transit cannabis and cannabis product inventories in the inventory tracking system each day by midnight;

(2) Utilizing a standard of weights and measures that is supported by the inventory tracking system;

(3) Maintaining the security of the inventory tracking system;

(4) Monitoring all inventory tracking system notifications;

(5) Responding to all inventory tracking system notifications with appropriate responses;

(6) Resolving all inventory tracking system notifications that identify areas of noncompliance;

(7) Properly indicating the creation of a cannabis or cannabis product batch;

(8) Inputting the correct assigned batch number;

(9) Accurately identifying the cultivation rooms where each plant is located;

(10) Accurately identifying when inventory has departed the premises or is part of an authorized transfer with an accompanying transportation manifest;

(11) Properly indicating all test results from a cannabis testing facility;

(12) Inputting the correct category for all cannabis and cannabis products;

(13) Providing a written explanation for any cannabis or cannabis products destruction;

(14) Providing a written explanation for any adjustment of weights in the inventory tracking system;

(15) Keeping the correct inventory tracking system package tags with cannabis or cannabis products until they are sold; and

(16) Shredding the inventory tracking system package tags once the cannabis or cannabis products are sold.

All establishments and any inventory tracking system users and administrators shall enter data into the inventory tracking system that fully accounts for all inventory tracking activities. Any omissions or misinformation in the inventory tracking system is considered a violation of this article and SDCL chapter 34-20G.

The absence of a live inventory tracking system prescribed by the department may not excuse medical cannabis establishments of the requirements of §§ 44:90:11:02 to 44:90:11:13, inclusive.

A medical cannabis establishment must comply with the inventory tracking system requirements and this section and complete all external transfers into the system within forty-five days. For the purposes of this section, the term, external transfer, means a transaction in the inventory tracking system where an establishment enters inventory into the system from a source that was not previously recorded in the system. External transfers pursuant to SDCL 34-20G-12 may continue to occur after the forty-five-day deadline.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022; 50 SDR 62, effective November 27, 2023.

General Authority: SDCL 34-20G-72(4)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(4)(b)(j).

44:90:11:02. Retention of records -- Electronic and paper -- Amended records. A medical cannabis establishment shall maintain, for a minimum of 18 months, the following records:

(1) All point of sale records, whether in electronic or paper form;

(2) Transport manifests; and

(3) Daily inventory records, transfer records, testing sample records, and transaction records.

No inventory record, transfer record, testing sample record, or transaction record may be altered after the date on which it was created. If necessary, an amended inventory record, transfer record, testing sample record, or transaction record may be created, but the original record is subject to record retention requirements.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

44:90:11:03. Daily inventory record. A medical cannabis establishment shall maintain and update by midnight of each day of operation, an electronic record of the establishment’s inventory of cannabis and cannabis products that must:

(1) For prepackaged cannabis or cannabis products, include the number of marketing layers of each item;

(2) Use the following units of measure:

(a) For seeds, seedlings, and plants, whole numbers;

(b) For cannabis flower, trim, pre-rolled cannabis cigarettes, and dry or powdered topical products, net weight in grams and ounces;

(d) For edible cannabis products and transdermal patches, milligrams of THC; and

(e) For ointments, creams, or lotions, net volume in fluid ounces;

(3) Reflect:

(a) The destruction of cannabis or disposal of cannabis waste;

(b) Theft or other loss; and

(4) Be maintained securely and may not identify any cardholder other than by the cardholder’s identification number.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022; 50 SDR 62, effective November 27, 2023.

General Authority: SDCL 34-20G-72(4)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(4)(b)(j).

44:90:11:04. Daily transfer record. A medical cannabis establishment shall maintain and update by midnight of each day of operation, an electronic record of all cannabis obtained from a cardholder or another establishment, and all cannabis and cannabis products transferred to another establishment that:

(1) Use the same units of measure as the inventory record;

(2) Reflect all transport manifests; and

(3) Be maintained securely and may not identify any cardholder except by the cardholder’s identification number.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

44:90:11:05. Daily testing sample record. A medical cannabis establishment shall maintain and update by midnight of each day of operation, an electronic testing sample record that must include:

(1) The batch identifier and quantity of each batch from which samples were drawn;

(2) The sample identifier of each sample created, its quantity, and the batch identifier associated with the sample;

(3) The tests to be performed; and

(4) Test results, including a note of whether the testing facility has indicated the batch is safe or unsafe for transfer to another establishment.

The quantity of each batch and each sample must be expressed in the same units as the inventory record.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

44:90:11:06. Cultivation facility inventory records -- Additional requirements. The inventory record of a cultivation facility must include a unique identifier for each immature plant and mature plant that must be printed on a label affixed to the growing container or on the inventory tracking system plant tag around the plant’s stalk. Each cannabis plant must have an inventory tracking system plant tag atached once it is over twelve inches in height. The inventory record must be updated each time:

(1) A seedling exceeds its size limit and is considered a plant;

(2) A plant flowers for the first time;

(3) A plant is manicured or harvested;

(4) A testing batch is created; or

(5) Cannabis is packaged for retail sale.

The record for a testing batch must indicate the unique identifier for each plant used to produce the batch. The record for cannabis packaged and labeled for transfer to a dispensary must include the number of marketing layers and the quantity of cannabis in each marketing layer, as expressed according to the relevant labeling requirement.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022; 50 SDR 62, effective November 27, 2023.

General Authority: SDCL 34-20G-72(4)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(4)(b)(j).

Cross Reference: Packaging, labeling, and advertising, chapter 44:90:10.

44:90:11:07. Cannabis product manufacturing facility inventory records -- Additional requirements. The inventory record of a cannabis product manufacturing facility must include the testing batch identification number of any cannabis and cannabis product obtained from a cultivation facility as follows:

(1) The inventory record must be updated each time:

(a) A quantity of concentrated cannabis is made from cannabis flower or trim;

(b) A quantity of cannabis product is made from cannabis or concentrated cannabis; or

(2) Any concentrate cannabis must be assigned to a testing batch, that must:

(a) Consist only of concentrated cannabis produced on a single day using the same concentration or extraction method; and

(b) Be entered into the inventory record with the identifier of any testing batch of cannabis from which it was produced.

(3) Any cannabis product shall be assigned to a testing batch that must:

(a) Consist only of a single type of product produced on a single day; and

(b) Be entered into the inventory record with the identifier of any testing batch of cannabis or concentrated cannabis from which it was produced.

The record for cannabis extracts or products packaged and labeled for transfer to a dispensary must include the testing batch identifier, the number of marketing layers, and the quantity of cannabis in each marketing layer, as expressed according to the relevant labeling requirement.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72.

44:90:11:08. Testing facility inventory records -- Additional requirements. A testing facility shall maintain and update by midnight each day of operation, an inventory record of:

(1) All samples in its possession, with unique identifiers and quantities expressed in units specified in its operating procedures; and

(2) All other cannabis and cannabis products acquired for training or reference purposes;

(3) The quantity of each sample rendered unusable by testing;

(4) The quantity of each sample returned to the medical cannabis establishment;

(5) The quantity of each sample destroyed; and

(6) The quantity of any sample lost, stolen, or otherwise unaccounted for.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

44:90:11:09. Dispensary inventory records -- Additional requirements. The inventory record of a dispensary must include the type of product, the testing batch identifier, the number of marketing layers, and the quantity of cannabis in each marketing layer, as expressed according to the relevant labeling requirement for all cannabis and cannabis products. The inventory record shall be updated each day of operation to reflect:

(1) Any cannabis or cannabis products received from another establishment;

(2) Sales to qualifying cardholders, which must include the cardholder’s identification number;

(3) Returns of merchandise from cardholders, whether to be resold, returned to another establishment, or destroyed;

(4) Transfers to another establishment, including returns; and

(5) Destruction of cannabis.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

44:90:11:10. Daily transaction record. A dispensary shall maintain and update by midnight each day of operation, a transaction record, that must include:

(1) The type of product, the testing batch identifier, the number of marketing layers, and the quantity of cannabis in each marketing layer, as expressed according to the relevant labeling requirement, for each sale or return; and

(2) The cardholder identification number associated with each quantity. The transaction record may not contain any other identifying information relating to a cardholder.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-71, 34-20G-72(5).

44:90:11:11. Department access to and use of establishment records. A medical cannabis establishment shall provide the department access to all records during an inspection of an establishment or vehicle or upon request.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5), 34-20G-88.

44:90:11:12. Inconsistencies in establishment recordkeeping -- Department action. Upon the discovery of any inconsistencies in the medical cannabis establishment’s record-keeping, the department shall:

(1) Make a determination of whether the inconsistencies are knowing or negligent;

(2) Inform the establishment in writing of its findings;

(3) If applicable, initiate suspension or revocation proceedings; and

(4) If applicable, refer possible criminal violations to state and local law enforcement.

Source: 48 SDR 40, effective October 5, 2021; 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(b)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5), 34-20G-88.

44:90:11:13. Authorized transfers -- Requirements and procedures. A medical cannabis establishment may transfer cannabis and cannabis products to another medical cannabis establishment, provided the establishment follows all inventory tracking system requirements and procedures of this chapter.

An establishment shall follow all authorized transfer procedures, including:

(1) Entering the correct information into the inventory tracking system identifying the transferor and the transferee; and

(2) Following all transportation and transfer requirements pursuant to §§ 44:90:04:18 through 44:90:04:24, inclusive.

Source: 49 SDR 9, effective August 8, 2022.

General Authority: SDCL 34-20G-72(5)(j).

Law Implemented: SDCL 34-20G-63, 34-20G-72(5).

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