Baking Bad: California's Cottage Food Law Turns Former 'Criminals' Into Small Business Owners

Back in June 2011, the Los Angeles Times ran a profile on local baker Mark Stambler and his fledgling artisan bread business, Pagnol Boulanger, whose crusty loaves regularly took home first-place honors at the Los Angeles County Fair and California State Fair. Trouble was, they were baked right from Stambler's Los Feliz home, a violation of county health code that food-based businesses operate out of a commercial kitchen.

The next day, a health inspector showed up on his doorstep to ensure that "no bread baking was taking place." Pagnol Boulanger was forced to suspend operations, and Stambler became an activist for California's cottage food industry.

Together with Silver Lake Assemblyman Mike Gatto, the two drafted a new bill called the California Homemade Food Act (AB 1616), which would allow the sale of certain homemade food products without the expense and red tape of opening a full-fledged commercial food business. Governor Jerry Brown signed the bill into law in September 2012, and just a few days after the law took effect in January 2013, Stambler became the first person in Los Angeles County to legally sell homemade food. Many other previously under-the-table bakers, jammers, and food artisans followed.

One year later, how has the California Homemade Food Act fared?

Statewide, over 1,200 home-based food businesses have been approved. Almost 270 of those businesses are registered in L.A. County. These businesses offer all manner of homemade goods deemed "non-potentially hazardous," including baked goods without cream or custard fillings, candy and chocolate, nuts and granola, jams and jellies, honey, vinegars, dried pasta, dried fruit, and roasted coffee and dried tea — basically, items that do not require refrigeration. The law does not extend to meat and dairy.

AB 1616 allows homemade food purveyors to make and sell their goods in private kitchens, provided they pass a safe food handling course, properly label their goods, and obtain a business license. This dramatically decreases the costs of opening a small business for someone working from home, but the law also caps the amount of revenue such a business can make under its provisions: $45,000 in annual gross sales in 2014, with an expected increase in 2015 to $50,000. (Last year, the cap was set at $35,000.) Sales over the cap will require the lease of a commercial kitchen and additional permitting and training.

Compared with Louisiana, Minnesota, and Wisconsin, whose cottage food laws cap entrepreneurs at $5,000 per year (that's less than $100 per week), California's cap seems reasonable. But compare that with the 20 states that have no set limits at all (from Arizona to New York, Montana to Alabama — almost half of all states with cottage food laws on the books), and that leads many food makers to push for a scrap on California's cap entirely.

In an uncertain economy, the launch of a thousand local businesses is nothing to sneeze at. Let's hope California continues to liberalize AB 1616 and pave the way for local food and small business.

For more information on how to register a home-based food business, check the LA County Public Health site.