We have been through enough state audits to know what separates a clean pass from a five-figure fine. The shops that pass are not luckier. They are more organized. They have systems, not hopes. This guide covers what auditors actually check, how to prepare in the week before, and the documentation habits that make you bulletproof.
What auditors actually check
Every state is different, but the core audit categories are nearly universal: inventory reconciliation, sales reporting accuracy, security protocol compliance, employee licensing, and waste disposal documentation. Auditors typically sample 30 to 60 days of records and cross-reference them against your state traceability system.
Inventory reconciliation
The auditor will physically count a random selection of products and compare those counts to your METRC or BioTrack records. Discrepancies over a few grams trigger deeper investigation. The most common cause of reconciliation failure is unrecorded waste, samples, or returns.
Sales reporting accuracy
Auditors pull a sample of transactions from your POS and verify that each one was reported to the state traceability system within the required timeframe. In California, that means same-day. In Washington, it means near real time. Missing or delayed reports are automatic violations.
The week-before checklist
- Run a full inventory reconciliation and document every discrepancy with a reason.
- Pull your last 60 days of METRC reports and verify every sale appears in both systems.
- Check that all employee badges and agent cards are current and on file.
- Test your security cameras: verify recording, timestamp accuracy, and retention period.
- Review waste logs for completeness: weight, method, witness signatures, disposal receipts.
- Print compliant receipt samples and verify they include all required fields.
Documentation habits that make you bulletproof
The shops that pass audits do not scramble to prepare. They maintain audit-ready documentation as a daily habit. Every inventory adjustment has a reason code and a manager approval. Every waste disposal has a witness signature and a weight log. Every employee hire includes a background check and badge verification before their first shift.
If you are running DubLedger, most of this is automated. Our compliance score dashboard tracks METRC sync health, inventory drift, and employee badge status in real time. But even the best software cannot replace disciplined operational habits. Train your team to treat every transaction as if an auditor is watching. Eventually, one will be.