South Dakota 2025: From HB 1125 to Summer Seizures—How to Audit Hemp Inventory for Compliance

Overview: The South Dakota Delta-8 Ban and 2025 Enforcement Landscape

South Dakota's approach to hemp-derived cannabinoids has sharpened in 2025, especially after the enactment of HB 1125. This law, which became effective July 1, 2024, outright bans the production, sale, and possession of hemp cannabinoids produced through chemical modification or conversion—a policy squarely targeting products like delta-8 and delta-10 THC.

In mid-2025, as part of a statewide compliance push, local authorities began active seizures of non-compliant products from retail shelves, triggering compliance urgency throughout the supply chain. A new bill, HB 1268, surfaced in 2025, seeking to further restrict hemp extraction—a signal that regulators are not finished tightening the rules.

This guide provides an actionable audit protocol for businesses to navigate the South Dakota delta-8 ban, explains key definitions and enforcement signals, and equips operators to document compliance with the law.

What Does South Dakota HB 1125 Prohibit?

"Chemically Modified" and "Converted" Hemp Cannabinoids Defined

The text of HB 1125 (2024) prohibits:

• The chemical modification or conversion of industrial hemp;
• The sale or distribution of chemically modified or converted industrial hemp or hemp products;
• Specifically, this targets cannabinoids like "delta-8, delta-10, and THC-O" made by converting CBD or other native hemp extracts using chemical reactions.

Native (non-converted) cannabinoids—exclusive of any chemical conversion—are not banned, but must be verified via certified analysis.

Enforcement in 2025: Increased Seizures and Compliance Checks

Key Developments

• July 2025: State and local law enforcement, in counties like Pennington, began announced and unannounced compliance sweeps and seizures from retailers, focusing on delta-8, delta-10, and other suspect products (source, Cannabis Business Times).
• Ongoing: Law enforcement guidance stresses that any product found with non-native THC isomers (e.g., delta-8, delta-10) produced via chemical conversion is subject to seizure and destruction.

Upcoming Regulatory Proposal: HB 1268

HB 1268 (2025) signals proposals to extend restrictions, notably targeting processing industrial hemp by extraction. This underlines that hemp licensees should expect continued scrutiny and adapt accordingly.

How to Audit Your Hemp Inventory: A Step-By-Step Protocol

To avoid seizures, license suspension, or other penalties, South Dakota hemp retailers and distributors must be diligent. Here’s how:

1. Supplier Certification on Non-Conversion

• Require updated supplier attestations stating all products are made without chemical conversion (no delta-8/delta-10 THC produced from CBD conversion).
• Maintain clear records of all such certifications in a compliance folder.

2. Batch-Level Certificates of Analysis (COAs)

• Obtain a current (recent batch) COA from a DEA-registered lab for every SKU.
• COA must confirm only “native” cannabinoids are present—
• • E.g., authentic delta-9-THC within federal hemp limits, and no delta-8, delta-10, THC-O, or other synthetic isomers unless naturally occurring at trace levels.
• File COAs with batch numbers, product/SKU, date tested, and laboratory credentials.

3. Age 21+ Sales Policy

• Affirm and enforce age-restricted sales: hemp-derived intoxicants, even those lawful under the Farm Bill, are to be sold only to individuals age 21 or older.
• Document customer-verification procedures (e.g., ID checks at point-of-sale).

4. SKU-by-SKU Inventory Triage: The Flowchart

Compliance Flow for Each Product:

Step 1: Does the product contain any cannabinoids other than CBD or native delta-9-THC?
→ Yes: Proceed to Step 2.
→ No: (CBD-only; likely in compliance, though check batch COA for trace isomers.)

Step 2: Does the COA or product label indicate delta-8, delta-10, THC-O, HHC, or other “novel” cannabinoids?
→ Yes: Pull the product from sale. Verify with supplier if produced via conversion.
→ No: Proceed to Step 3.

Step 3: Does the supplier provide written assurance (and laboratory backing) that cannabinoids present are native and have not been chemically converted from CBD or other sources?
→ No: Pull the product from sale until documentation is complete.
→ Yes: Retain all documentation. Continue sales.

Step 4: For remaining products, file COAs and supplier certifications together.
→ Prepare these for immediate production upon inspection.

5. Shelf Pulls and Proper Documentation

• Immediately remove all suspect products (lacking documentation, or listing delta-8, delta-10, or similar on the label/COA) from the sales floor.
• Create a written log of pulled SKUs (date, reason, quantity, batch/lot).
• Communicate with upstream suppliers regarding non-compliant SKUs for return or destruction.

Enforcement Hazards and Penalties

• Retailers and distributors face product seizure, potential fines, and suspension or revocation of state hemp licenses for violations of HB 1125 (SD Legislature source).
• Repeated or willful violations may result in increased scrutiny and potential criminal penalties under South Dakota law.

Recent official guidance (Rapid City Post) makes it clear that good-faith compliance—demonstrated by solid records and prompt shelf pulls—can weigh in a licensee's favor if non-compliant products are found.

The Must-Have Compliance Documentation Checklist for Audits

Maintain the following, ready for inspection at any time:

• Supplier certifications attesting NO chemical conversion or synthetic isomers were used
• Batch-level COAs from DEA-registered or state-licensed labs verifying all cannabinoids are native
• Inventory logs with product SKUs, batch/lot, sourcing, and documentation trail
• Shelf-pull and disposal logs (dates, SKUs, reasons, outcomes)
• Records of staff training on age-restricted sales and inventory review protocol

What Lies Ahead: Staying Proactive in a Moving Landscape

South Dakota's regulatory climate for hemp-derived cannabinoids is swiftly evolving—as HB 1268 and the 2025 enforcement surge show. Businesses operating in this space must:

• Monitor new bills and regulatory releases (regularly check the South Dakota Legislature website and Department of Agriculture and Natural Resources).
• Continually audit inventory and documentation—especially after every new shipment.
• Train staff on checking COAs and identifying high-risk formulations on the shelf.

Conclusion: Navigating the 2025 South Dakota Delta-8 Ban

South Dakota’s aggressive posture on converted hemp cannabinoids like delta-8 and delta-10 puts the onus on retailers and distributors to act with discipline and transparency. The July 2025 enforcement push is likely just the beginning. Adopting an airtight audit protocol, keeping documentation current, and promptly removing suspect SKUs builds a defensible compliance position—helping avoid inventory loss, fines, or worse.

For industry-specific guidance, access compliance resources, or to stay ahead of 2025 regulatory changes, visit CannabisRegulations.ai and empower your operation with real-time expertise.