Start your cottage food business in California
California offers two cottage food operation classes with inflation-adjusted revenue caps. Choose Class A for direct sales or Class B for wholesale opportunities.
Last Updated: May 2026 • Verified with official sources
California Cottage Food Law Overview
California's cottage food law allows home bakers to produce and sell low-risk foods directly to consumers.
Class A: ~$86,000 annual cap (base $75,000, adjusted annually for inflation)
Class B: ~$172,000 annual cap (base $150,000, adjusted annually for inflation)
Class A: Self-registration online. Class B: Permit required from local health department.
Class A: No inspection. Class B: Initial and annual inspections required.
Must complete California food processor course (online, ~3 hours).
Class A: Direct sales only. Class B: Can sell wholesale to stores/restaurants.
Revenue caps increase annually based on California Consumer Price Index (CPI)
What You Can (and Can't) Sell
- Baked goods (cookies, cakes, breads, pastries)
- Candy and confections
- Fruit pies and cobblers
- Jams and jellies
- Dried fruits and vegetables
- Popcorn and snack mixes
- Granola and cereals
- Roasted coffee beans
- Dried herbs and spices
- Foods requiring refrigeration
- Cream-filled pastries
- Meat products and jerky
- Canned goods (non-acidified)
- Pickled products
- Dairy products
- Nut butters
- Pet treats
Sales Limits & Locations
Class A: ~$86,000 | Class B: ~$172,000 (2025 estimates)
California offers two cottage food operation types with inflation-adjusted caps. As of 2025: Class A operations can earn approximately $86,000 (base $75,000 from AB 1144, adjusted by CPI). Class B operations can earn approximately $172,000 (base $150,000, adjusted by CPI). These caps increase annually. Check with CDPH for current year's exact figures.
- Farmers markets
- Direct sales from home
- Community events and fairs
- Online sales (local pickup only)
- Cannot sell through retail stores
- Cannot sell to restaurants or food service
- Cannot ship products
- Must sell directly to consumers
Requirements & Regulations
Class A: Self-registration online. Class B: Permit required from local health department.
Class A: No inspection. Class B: Initial and annual inspections required.
Must complete California food processor course (online, ~3 hours).
Not required by law, but recommended for liability protection.
Check local zoning ordinances for home-based business restrictions.
Sell out before you bake
BakeryFlow is a mobile app for cottage bakers. Take pre-orders, manage drops, and get paid—all from your phone.
Looking for 5 bakers to help shape the product. Early users get free access.
Labeling Requirements
- Statement: 'Made in a Home Kitchen'
- Product name
- Ingredient list in descending order by weight
- Net weight or volume
- Producer name and address
- Allergen information (if applicable)
Legible font size
All information must be on the label
Production & Kitchen Requirements
California cottage food operations must follow specific production rules to ensure food safety.
- All products must be made in your primary residence kitchen
- Kitchen must be maintained in a clean and sanitary condition
- Pets should be kept out of the kitchen during food production
- Use potable (drinking quality) water for all food preparation
- Store ingredients properly to prevent contamination
- Maintain proper refrigeration temperatures (below 41°F)
- Wash hands thoroughly before and during food preparation
- Use clean utensils, equipment, and food-contact surfaces
- Keep accurate records of production dates and sales
- Do not prepare cottage foods at the same time as potentially hazardous foods
Where & How You Can Sell
Allowed Sales Channels
Sell directly to consumers at approved farmers markets throughout California.
⚠️ Some markets may require vendor registration
Customers can pick up orders from your home. Accept orders online, by phone, or in person.
⚠️ Must comply with local zoning laws for home-based businesses
Sell at fairs, festivals, church events, and craft shows.
Accept orders through a website or social media for local pickup.
⚠️ Cannot ship or deliver products
Prohibited Sales Channels
Cannot sell through grocery stores, convenience stores, or other retail outlets
Cannot sell to restaurants, cafes, or food service establishments
Cannot sell to third parties for resale. Must sell directly to end consumers.
Cannot ship products via USPS, UPS, FedEx, or any delivery service
Additional Exemptions
- Bake sales and fundraisers by nonprofit organizations may be exempt from labeling if all proceeds go to the organization
- Products given away for free (samples, gifts) do not require labeling
Violations & Enforcement
While California has a permissive cottage food law, violations can result in penalties.
Penalty: Cease and desist order, potential fines, and possible legal action for repeat offenses
Penalty: Warning letter for first offense, fines for continued violations
Penalty: Immediate shutdown of operation, fines, and potential legal action
Penalty: Investigation by health department, potential civil liability, and criminal charges if negligence is proven
Frequently Asked Questions
Class A: Self-registration online. Class B: Permit required from local health department. However, you may want to register your business name and obtain an EIN for tax purposes.
Yes, you can list products on Etsy or your own website, but you cannot ship them. All sales must be for local pickup only within California.
No. Cottage food operations are limited to selling individual products directly to consumers. Catering requires a commercial food license.
The law does not explicitly prohibit helpers, but all production must occur in your home kitchen. If you hire employees, you may trigger additional business regulations and tax requirements.
Yes. Most cottage food products are subject to sales tax. You must register with the state tax authority, collect sales tax from customers, and file regular returns.
Yes, as long as it's your primary residence. However, check your lease agreement as some landlords prohibit home-based businesses.
List all ingredients in descending order by weight. If your product contains any of the major allergens (milk, eggs, wheat, soy, peanuts, tree nuts, fish, shellfish), include a 'Contains:' statement on the label.
Getting Started Checklist
Follow these steps to launch your California cottage food business:
- Choose your product(s) from the allowed foods list
- Perfect your recipes and test them with friends/family
- Design and print labels with all required information
- Set your prices (factor in ingredients, time, and packaging)
- Register for sales tax collection
- Consider getting liability insurance
- Set up a simple bookkeeping system to track income and expenses
- Find your first sales venue (farmers market, online, etc.)
- Start small and scale as you gain experience
Scaling Beyond Cottage Food
If your business outgrows the cottage food law, consider these options:
- Rent time in a commercial kitchen or shared-use facility
- Apply for a retail food establishment license
- Build or lease your own commercial kitchen space
- Partner with a co-packer for larger production runs
- Explore wholesale opportunities with proper licensing