Health and Safety/Unsafe Condition

1. 44:90-09:01 Licensee’s cultivation and manufacturer’s failure to test every batch of cannabis Intended for consumption prior to transfer for retail sale.

Findings Include:
a. Record review of METRC for 605 Cannabis identified:

i. Products are created from raw plant material/distillate that was entered during the immaculate conception timeframe. See Appendix B for a complete list of examples. package ending in 0001 (20,000g distillate), 0003 (2,494.76g flower), 0055 (90,700g flower), and 0056 (15,000g distillate).
ii. Material brought in during the immaculate conception timeframe was not tested prior to manufacturing of new products

NON-COMPLIANT with 44:90:09:01 Mandatory Testing Prior to Transfer for Retail Sale

2. 44:90:07:04 (8-10) Prohibited Manufacturing activities: Delta- (hemp) and terpenes added to cannabis.

Findings include:
a. Upon thorough investigation of METRC for 605 Cannabis, records indicate that the original plant material/distillate used to create new products was never tested.

i. In addition, 605 Cannabis has added hemp to their products. For examples, see Appendix A. Appendix A Continued.
ii. 605 Cannabis has added Delta-8 (a hemp derived cannabinoid) to their products. 13 out of the 18 samples collected on 1/19/2023 contain Delta-8, which is 72%.

b. During an interview with Mr. Horsted, he informed inspectors that they add artificial terpenes to all cartridges to Improve flavor.

i. Inspectors observed bottles of artificial terpenes to include grape and apple flavors.
ii. A review of METRC did not identify any establishment producing or selling cannabis terpenes within South Dakota, therefore, the artificial terpenes being added were obtained from an online source.

1. Cartridges should only include cannabis or cannabis related extracts.
2 The product label did not include an ingredients list,

NON-COMPLIANT with 44:90:07:04 (8-10)* Prohibited manufacturing Activities

*(8)  Manufacture a product using cannabis or concentrated cannabis that has not passed any test required by the department;

*(9)  Manufacture cannabis products intended for non-human consumption;

*(10)  Manufacture products that do not contain cannabis on the same premises as cannabis products;

3. 44:30:09:09 (3)(f) Inappropriate labeling of product undergoing testing

Findings Include:

a. Observed the product topical balm placed on a shelf.
b. Mr. Horsted stated that it was stored there while awaiting test results.
c. Inappropriate labeling of product currently undergoing testing.

NON-COMPLIANT with 44:90:09:09(3)(F)* Storage While Awaiting Test Results

*(f)  In bold, capital letters, no smaller than 12-point font, PRODUCT NOT TESTED.

4. 4:90:09:12 (1-3) Failure to remediate a nonusable botch of cannabis: failure to follow operating procedures, failure to have functioning security cameras.

Findings include:
a. Interview of Mr. Horsted about obtaining a sample of RSO.

i. Mr. Horsted indicated the RSO was destroyed but some of the product was used in manufacturing a topical balm on 12/26/2022.
ii. No records were included in METRC Indicating the cannabis product was to be destroyed.
iii. As of 2/2/2023, the MITRC inventory tracking system stated a quantity of RSO is still available.

b. Interview of Mr. Horsted regarding the method used to destroy the RSO product

i. Mr. Horsted was unable to verify the method used to destroy the RSO product.

c. Inspectors were unable to observe the destruction of the RSO product via the camera system.

i. Mr. Horsted was unable to access the security camera system on his computer or phone.

NON-COMPLIANT with 44:90:09:12 (1-3)* Destruction of Non-Usable Batches- Notice •and Recall