The narcotics stock book: what to record, how to reconcile and how to close a period

Where the duty comes from

The duty starts in the UN drug control treaties. Article 34 of the 1961 Single Convention on Narcotic Drugs requires manufacturers, traders and other licensed parties to keep records showing the quantities of each drug manufactured and of each individual acquisition and disposal, and to keep them for at least two years. Article 11 of the 1971 Convention on Psychotropic Substances sets comparable record-keeping duties for psychotropic substances, with the detail depending on the schedule.

Each country turns these duties into national law. In Germany, the Narcotics Act (BtMG) sets the record in section 17, destruction in section 16 and reporting to the BfArM in section 18; the Betäubungsmittel-Binnenhandelsverordnung (BtMBinHV) sets the documents for transfers between licence holders. Since 1 April 2024, medical cannabis in Germany falls under the Medical Cannabis Act (MedCanG) instead, which has its own record and reporting provision in section 16. In Portugal, Decreto-Lei 15/93 and Decreto Regulamentar 61/94 set the equivalent duties, supervised by INFARMED.

This guide uses the German BtMG as the worked example because its wording is precise. Check the national rules that apply to your licence.

What each entry must contain

Section 17 of the BtMG is a good template for what an inspector expects to find. For each site and each substance, the licence holder records:

The records must be kept for three years in Germany, counted from the last entry or the last invoice date. Keeping the stock book electronically is common; what matters is that entries are attributable, dated and cannot be changed without a visible trace.

Reconciling the book to physical stock

The stock book is only useful if it agrees with what is on the shelf. Reconciliation compares the book balance with a physical count, lot by lot, and explains every difference. Typical causes are:

• weighing tolerances on receipt and dispatch;
• processing losses and yields that were estimated rather than measured;
• samples taken for quality control or retention;
• destruction that was carried out but not yet booked;
• returns received but not yet assessed.

A difference is investigated, its cause recorded, and the correction entered as a new entry that refers to the investigation. Overwriting the original figure removes the evidence an inspector will ask for. Unexplained differences in a controlled substance may also have to be reported to the authority, so the investigation should start as soon as the count is done.

Closing and signing a period

The law asks for a running record and periodic reports. A period close is how you make each reported period final. It usually covers the same period as the report: in Germany, the half-years ending 30 June and 31 December, reported to the BfArM by 31 July and 31 January.

A close typically has four steps. First, post every movement of the period, including production use, samples and destruction. Second, count physical stock and reconcile it to the book. Third, have the responsible person review the reconciliation and sign it, recording who signed, when and what the signature means. Fourth, lock the period so that later corrections are made in the next open period and refer back to the one they correct. The signed close is then the basis for the report.

Destruction entries

Destruction is the entry inspectors check most closely, because it removes stock from the book without a counterparty. In Germany, section 16 of the BtMG requires the owner to destroy controlled substances that can no longer be used in the presence of two witnesses, in a way that rules out recovery, and to keep a written record for three years. Quantities destroyed are also part of the half-yearly report. Record the lot, the quantity, the method, the date and the witnesses, and link the record to the stock book entry. The destruction register guide covers the record in detail.

Checklist before you close a period

1. Post every movement of the period.Receipts, production use, samples, dispatches, returns and destruction.
2. Check each dispatch against a valid licence.The recipient must have held a licence for the substance on the date of dispatch.
3. Count physical stock by lot and site.Use the same units as the book: weight for substances, units for packs.
4. Explain every difference.Record the cause and enter corrections as new, referenced entries.
5. Confirm destruction records are complete.Witnesses, method, quantity and date for each destruction in the period.
6. Sign the reconciliation.The responsible person signs, with name, date and meaning.
7. Lock the period and prepare the report.Use the authority's forms and deadlines.

Where 365Phyta fits

365Phyta Licensing keeps the controlled-substance stock book inside Microsoft Dynamics 365 Business Central. Every receipt, process use, sale, return and destruction posts to it, it reconciles to the item ledger to the gram, and each period is closed with an electronic signature. A destruction cannot be recorded without a second witness who is a different person, and orders are checked against licences, permits and quotas before release (see narcotics quotas and INCB estimates). National report formats come with the country packs for Germany and Portugal, which are in development. See controlled substances, the medical cannabis use case, the terms narcotics stock book and destruction register, and pricing.

FAQ

Sources

1. UNODC, Single Convention on Narcotic Drugs, 1961, Article 34 (records) and Articles 19 and 20 (estimates and statistics).
2. UNODC, Convention on Psychotropic Substances, 1971, Article 11 (records).
3. Betäubungsmittelgesetz (gesetze-im-internet.de): § 16 Vernichtung, § 17 Aufzeichnungen, § 18 Meldungen.
4. Betäubungsmittel-Binnenhandelsverordnung (BtMBinHV).
5. Medizinal-Cannabisgesetz: § 16 Aufzeichnungen und Meldungen.
6. Decreto-Lei n.º 15/93 (Portugal), applied by INFARMED.

Last reviewed: September 2026. General information, not legal advice. Terms are defined in the glossary.