The Homemade Food Act, effective in 2013, is intended to stimulate the development, at the neighborhood level, of homemade low-risk food products. See Stats 2012, ch 415, §1; Govt C §51035. Before its enactment, existing law prohibited food stored or prepared in a private home from being used or offered for sale in a food facility. Health & S C §§113789, 114021.
The Act created the legal structure for small-scale food production industries, establishing limits and requirements for operations. See Govt C §51035; Health & S C §§113758, 114365. The types of food are limited to a list of “approved food products” posted on the Department of Public Health’s website. Health & S C §114365.5.
Individuals who own and run these home-based businesses are referred to as “cottage food operators,” and their gross annual sales may not exceed $50,000. Health & S C §113758. The law also prohibits certain domestic activities while food preparation, packaging, or handling is occurring. See Health & S C §114365(a)(1)(A)(i).
The law is set up as a two-tier system depending on whom the operations sell to (Health & S C §114365(a)):
- “Class A” cottage food operations can sell only directly to consumers, but
- “Class B” operations can make direct and indirect sales (e.g., through third-party stores or restaurants).
Local county health departments are responsible for compliance and have implemented their interpretations on the new law for purposes of permits and regulations. See, e.g., Los Angeles County public health regulations.
And local zoning laws still apply to these operations; thus, other permits may still be required to operate these businesses from the home.
Anyone considering opening a cottage food operation should review the following:
- The local county’s Department of Public Health website for licensing information and to determine requirements for home, kitchen, and storage facilities.
- The California Department of Public Health website that oversees the law.
- The insurer for cost and any required policy changes.
From 2013 to 2019, the relevant statutes were severely prohibitive and only allowed sales of a very restrictive list of food items (mostly nonperishable). But then the amendment to Health & S C §113789 added “microenterprise home kitchen operations” to other existing “food facilities” and extended the Homemade Food Act to allow home cooks to sell prepared foods. See Health & S C §§114367–114367.6.
But even with this amendment, many cooks may still have to wait months or years for the opportunity to engage in microenterprise home kitchen operations because the law requires county and city environmental health departments to choose whether they want to conduct inspections and issue permits. No counties or cities have done so as of January 1, 2019. Some, such as San Francisco, Santa Cruz, Alameda County, San Mateo County, Santa Clara County, and San Diego County, are still in the early stages of consideration.
It pays to watch this burgeoning area and be ready to advise clients on it. Learn the latest on home businesses in CEB’s Neighbor Disputes: Law and Litigation, chap 12.
Other CEBblog™ articles you may find useful:
- Checklist for Disputes Over a Neighbor’s Home Business
- Using Buy-Sell Agreements to Protect Family-Owned Businesses
- How Far Does a Landowner’s Liability Go?
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