Cottage Food Business
A Cottage Food Operation (CFO) is an enterprise at a private home where specific low-risk food products, which do not require refrigeration, are prepared or repackaged for sale.
An enterprise that has more than the amount in gross annual sales that is specified in this subdivision, is operated by a cottage food operator, and has not more than one full-time equivalent cottage food employee, not including a family member or household member of the cottage food operator, within the registered or permitted area of a private home where the cottage food operator resides and where cottage food products are prepared or packaged for direct or indirect sale to consumers pursuant to this part. Commencing in 2015, and each subsequent year thereafter, the enterprise shall not have more than fifty thousand dollars ($50,000) in gross annual sales in the calendar year. A cottage food operation includes both of the following:
A “Class A” cottage food operation, which is a cottage food operation that may engage only in direct sales of cottage food products from the cottage food operation or other direct sales revenues described in paragraph (4) of subdivision (b) of H&S Code 110460.
Direct sales means a transaction between the CFO operator and a consumer where the consumer purchases the cottage food product directly from the CFO. Direct sales include, but are not limited to, transactions at holiday bazaars or other temporary events, such as bake sales or food swaps, transactions at permitted farm stands and certified farmers markets, through community-supported agriculture subscriptions and transactions occurring in person in the cottage food operation.
A “Class B” cottage food operation, which is a cottage food operation that may engage in both direct sales and indirect sales of cottage food products from the cottage food operation, from direct sales revenues described in paragraph (4) of subdivision (b), from offsite events, or from a third party retail food facility described in paragraph (5) of subdivision (b) of H&S Code 110460.
Indirect sales means an interaction between a CFO, a third-party retailer, and a consumer, where the consumer purchases cottage food products made by the CFO from a third party retailer that holds a valid permit issued by the local environmental health department to their jurisdiction. Indirect sales include, but are not limited to, sales made to retail shops or to retail food facilities where food may be immediately consumed on the premises.