Introduction to Cottage Food Laws in Maryland
Local food isn’t just about raw produce and meats! Prepared local food can also be found in farmers markets, local stores, and food co-ops. Often those products have been made by small home based businesses, using the cottage food laws in Maryland.
You don’t have to grow food to sell local food! Cottage food laws allow small home based businesses, with restrictions, to sell value-added local food to customers.
If you are interested in selling local food, then learning more about the cottage food laws in Maryland could be very useful for you. There may be a place for you to set up your own local food business!
What is a Cottage Food Law?
Cottage food laws were created to allow small businesses to sell prepared food products without a lot of initial investment. The laws allow them to sell low risk foods without spending a lot of money to find a commercial kitchen, to get a business license, or to pay insurance.
Cottage food laws allow small businesses to sell food, but usually allow them to only sell low risk food. Low risk foods are those that don’t require refrigeration and are less likely to harbor food borne bacteria.
Cottage food laws in Maryland allow more small business to open. That means more Marylanders can enjoy a variety of cottage food products. They know know that the foods are low risk, and can be enjoyed safely. More local products are available thanks to cottage food laws in Maryland.
A small business can use the cottage food law as a step up to a larger operation, by trying out food sales without needing a lot of start up money. Or a small business can stay at the cottage food level.
If a business wants to scale up because their cottage foods are popular, they can then look into licensing and commercial kitchens. Their cottage food has allowed an income, as well as proving that their product has a market, meaning loans may be easier to obtain.
It can be expensive to take on loans, and some may not be able to raise enough money to start a large food business. A cottage food business can allow them to start out slowly, without a lot of start-up cash on hand.
Cottage Food Laws in Maryland
The Maryland Cottage Food Law is based on COMAR 10.15.03.02 and COMAR 10.15.03.27. It is meant for businesses that produce or package cottage food products in a residential kitchen, and have annual revenues of less than $25,000.
The original cottage food laws in Maryland were passed in 2012, defining what cottage foods were. Initially, those products were only allowed to be sold at farmers markets and public events.
In 2018, the cottage food laws in Maryland were amended so foods could also be sold in person or through the mail inside of Maryland. In 2019, the law was further amended to allow for sales of cottage food to retail stores.
That means that you can produce cottage foods at home in your own kitchen without special equipment, but you have to make less than $25,000 a year in revenue. Revenue means total income, so that means total sales, not total profit.
Your cottage foods can be sold only in Maryland. You can sell directly from your home, at a farmers market, at a public event, through personal delivery or mail delivery, or to a retail food store.
The cottage food laws in Maryland are considered rather restrictive, but still offer a wonderful option for home based businesses to get started. Only low risk foods may be sold. However, the laws do not require a license, inspection, or training.
Low risk foods means foods that are unlikely to harbor or grow hazardous bacteria. The cottage food laws in Maryland specify exactly what can and cannot be sold.
Low risk foods include many baked goods that do not have potentially hazardous toppings or fillings (meaning things that don’t require refrigeration, like cheeses).
Low risk foods also include water bath canned high acid fruit jams and butters.
Hard candy that does not need refrigeration, and chocolate foods that are made from commercially manufactured chocolate (not from raw cocoa beans, and no soft candies) are also low risk foods.
You may also sell whole roasted coffee beans and natural honey, as they are also considered low risk.
Finally, snacks like popcorn, trail mix, and cereals can be sold, as well as high acid fruit leathers.
When selling your cottage foods, you must label them properly. The University of Maryland Extension Office has information about how to properly label your foods.
Though selling at farmers markets or by delivery does not need documentation, you have to fill out this form if you want to sell to retail food establishments.
Moving beyond Cottage Foods
What if you want to start offering products that are not allowed via the cottage food laws in Maryland? Or your sales are going so well that you want to sell more than $25,000 worth of products?
There is an intermediary step for farmers, for On Farm Home Processing, outlined in COMAR 10.15.04.18. It allows for up to $40,000 in sales, and includes dried produce and herb blends. They may also allow for meats, fish, salsas, and peanut butter.
The On Farm Home Processing allows for food processing in a residential kitchen on the farm, and requires inspections and training for the producer. A full list of foods that are allowed can be found here.
If you aren’t a farmer, or want to sell more than $40,000 of product, you have to look into becoming a full fledged food seller.
Once a cottage food seller has outgrown the cottage food laws in Maryland, they need to visit Rules for Specific Foods to find out more about the regulations for their products. Different foods require different handling.
If you have a cottage food business and wish to expand, showing profitability will help you and potential lenders to decide how much money you may need for an expanded business.
If you have a cottage food business and enjoy staying small, enjoy it! Having a micro business to bring you side income is a great way to be involved with your community and to enjoy local foods.
I hope anyone who is interested in operating their own cottage food business will do so. I look forward to seeing your products available!
