New Jersey Finally Legalizes Home Baking Businesses
After more than a decade of battles in both the statehouse and the courthouse, New Jersey finally lifted its ban on selling home-baked goods on Monday. Previously, New Jersey was the only state in the nation that made it illegal to open a business selling homemade cakes, cookies, and other baked goods. Baking bad could even risk fines of up to $1,000.
Those who didn’t want to run a black market bakery were forced to either build or rent out a commercial kitchen, pay multiple fees as a “retail commercial establishment,” and comply with hundreds of pages of regulations. That clearly created a massive barrier to entry.
As far back as 2009, a coalition of home bakers pressed New Jersey lawmakers to enact “cottage food” legislation that would have let residents use their home kitchens to bake and sell shelf-stable treats. Although cottage food bills repeatedly passed the state Assembly (and were even approved unanimously on three separate occasions), reform was always tabled in the Senate.
Fed up, the bakers, represented by the Institute for Justice, sue the state in December 2017, arguing that the “arbitrary and irrational” ban on home baking violated the New Jersey Constitution. Prompted by the IJ lawsuit, in April 2020, the New Jersey Department of Health proposed creating a new permit for cottage food businesses.
After receiving hundreds of supportive comments, rules for the new permit system were approved by the governor and adopted in July 2021, before taking effect on Monday. Once the permit application goes online (expected later this month), New Jersey’s home bakers will finally be able to operate legally.
“I am beyond happy that New Jersey has a cottage food law,” said Martha Rabello, one of the plaintiffs in the IJ lawsuit. “I can’t wait to see New Jersey home bakers thriving.”
Under the new rules, cottage food businesses are limited to a set list of 18 food categories, including baked goods, jams and jellies, dried herbs, dried pasta, fudge, and granola. Anyone who wants to sell a shelf-stable item not on the list will first have to submit a written application to the state.
Approved cottage food products can be sold at farmer’s markets, events, from home, and online; mail deliveries are also permitted. On the other hand, selling through retail outlets (like grocery stores or restaurants) or across state lines remains prohibited.
All told, home bakers can earn up to $50,000 in gross annual sales in New Jersey. Although $50,000 in allowable sales is certainly better than $0, more than 35 states already have either a higher sales cap for homemade food businesses, or don’t impose any sales cap whatsoever.
Nevertheless, with the demise of New Jersey’s half-baked prohibition, home baking businesses can finally flourish in the Garden State. Look no further than right across the Hudson, where roughly 8,500 businesses are operating under New York’s cottage food law.
“The door is now open for bakers to be compensated for their talents just as any other professional is paid for their time and services,” said Mandy Coriston of the New Jersey Home Bakers Association. “More importantly, it offers consumers a new freedom of choice in where they source their baked goods, and allows bakers across every walk of life to work in the place they feel most comfortable—their homes.”