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Colorado

The “Colorado Cottage Foods Act” began in 2012 and was amended in 2013, 2015, and 2016 (read about the history of the act). 2016’s amendment (SB 16-058) added all non-PHF foods to the approved list (including pickled items) and enabled internet sales within the state.

The current law restricts producers to direct sales only, but no license from the health department is needed. However, producers must take a training course before they can start selling.

One thing that differentiates Colorado from other states is that rather than limiting overall sales per year, they limit the sales of each product ($10,000 per product/flavor). This allows producers to sell an unlimited amount of food, as long as they keep creating different products.

Selling

A sign must be displayed at the point of sale with this statement: “This product was produced in a home kitchen that is not subject to state licensure or inspection. This product is not intended for resale.”

Interstate sales are not allowed. Your products may be sold online and shipped/delivered within Colorado.

Although your products cannot be resold, you can assign a “designated representative” to sell on your behalf.

Although your products cannot be sold through stores or restaurants, you can ask the health department about selling directly at those locations, which they may allow on a case-by-case basis.

Here is more information about selling.

Starting a cottage food business?

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Top 10 Mistakes To Avoid When Starting A Cottage Food Business

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Allowed Foods

Prohibited Foods

Here is more information about eligible foodsallowed ingredients, and allowed/disallowed canned goods.

Pickled fruits and vegetables must have a finished pH level of 4.6 or below. Whole, fresh peppers cannot be used to make pepper jellies/jams/preserves, but dried spices can be used instead. The health department offers free pH testing as well as information about best practices for producing these items.

Freeze-dried produce is allowed.

Whole eggs may only be sold under certain conditions, including a 250 dozen per-month limit.

Only "non-potentially hazardous" foods are allowed, but certain non-PHFs may not be allowed. Most foods that don't need to be refrigerated (foods without meat, cheese, etc.) are considered non-potentially hazardous. Learn more

Limitations

Limitations
Sales are limited to $10,000 per product
Although the producer can make no more than $10,000 of net revenue per year from a product, product variants are considered different products. For instance, strawberry jelly and grape jelly are two different products.

Business

Food Handler Course

You must take a food handler training course, which can be taken online for $10 – $15 at statefoodsafety.com.

If you would prefer to take a course in-person, the CSU Extension’s Food Safety Works program offers classes around the state which usually cost between $5 and $30. For more information, contact your county extension office or local health department.

CSU is also developing a comprehensive online course for those interested in learning about starting a cottage food operation. It satisfies this training requirement, but the course takes 3 weeks and costs $170.

Business License

You should contact your local city and county offices to determine if you need a business license.

Sales Tax

You are not required to collect state sales tax, but you may be required to collect local sales taxes. To see if this could apply to you, check out this page and click on “View Sales Rates and Taxes”, then click on “View Local Sales Tax Rates”. Even if your county does require sales tax, you may still be able to get an exemption because you’re selling food that won’t be consumed on your premises (you need to check with your city and/or county about that).

Here is more information about starting a cottage food business.

Though not required, the health department recommends getting private water systems (like wells) tested once a year.

Labeling

Sample Label

Chocolate Chip Cookies

"This product was produced in a home kitchen that is not subject to state licensure or inspection and that may also process common food allergens such as tree nuts, peanuts, eggs, soy, wheat, milk, fish, and crustacean shellfish. This product is not intended for resale."


Forrager Cookie Company

123 Chewy Way, Cookietown, CO 73531


Phone: (123) 456-7890


Ingredients: enriched flour (wheat flour, malted barley flour, niacin, iron, thiamin mononitrate, riboflavin, folic acid), butter (cream, salt), semi-sweet chocolate (sugar, chocolate, cocoa butter, milkfat, soy lecithin, natural flavors), brown sugar, granulated sugar, eggs, vanilla extract (vanilla bean extract, alcohol, sugar), baking soda, salt (salt, calcium silicate)


Produced on 10/23/2019


In addition to the labeling requirements, a sign must be displayed at the point of sale with this statement: “This product was produced in a home kitchen that is not subject to state licensure or inspection. This product is not intended for resale.”

Alternatively, an email address can be substituted for a phone number on the label.

If a baked good or confection contains alcohol, it is recommended to include “This product contains alcohol” on the label.

Here is more information about packaging and labeling.

Workplace

Beyond your home kitchen, you can also make your products at other private, public, or commercial kitchens.

Resources

Contacts
Department
Division of Environmental Health and Sustainability
Email
[email protected]
Telephone
303-692-3645, option 3
Law Dates
March 2012
SB 12-048
April 2013
HB 13-1158
August 2015
SB 15-085
August 2015
HB 15-1102
August 2016
SB 16-058

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Starting a cottage food business?

DOWNLOAD THIS FREE GUIDE

Top 10 Mistakes To Avoid When Starting A Cottage Food Business

(Some of them just might surprise you!)

Comments

    You shouldn’t have to collect state sales taxes, but you may need to pay local sales taxes. To see if this could apply to you, check out this page and click on “View Local Sales Tax Rates”.

    Even if your county does require sales tax, you may still get an exemption because you’re selling food that won’t be consumed on your premises. But you need to check with your city and/or county about that.

1. Do you know if I can I sale my cookies online? If so, can I sale them to out of state customers?
2. And can I sale Indonesian bakery (cookies, cakes, mostly vegan) from my home kitchen?
3. Where can I get the license?

Thanks.

    1. Please read the notes in the selling section. In addition to that, it’s worth noting that shipping would not be allowed. If it were my business, I would sell online, but you must meet the buyer in-person to deliver their purchase.
    The law does not say whether or not interstate sales are allowed. Almost all states disallow interstate sales, since the federal food laws disallow sales of homemade food. If it were my business, I would not do interstate sales. I doubt, however, given that you can’t ship, that interstate sales would ever really be feasible anyhow.

    2. As long as they fall into the list of allowed foods and don’t need refrigeration, then yes.

    3. You don’t need a license — all you need is training.

If I use a commercial kitchen does the labeling change? I am not technically making food…simply repackaging spices and teas.

    Assuming that you’re operating as a cottage food business and not with a commercial license, then the labeling would not change. It’s funny that you ask this, simply because Colorado is one of the only states that actually allows cottage food operators to also use a commercial kitchen for preparing their products. In basically any other state, you would need to follow the federal labeling requirements.

    If it needs refrigeration, it would not be allowed. I assume you’re trying to determine if it needs to be refrigerated or not.
    Interestingly, each state has different rules about what “non-potentially hazardous” means, but generally, it refers to items that are below a pH of 4.6 or below a water activity level of 0.85. I would think that a frosting would have a rather high water activity level. You can get products tested in a lab to determine if they are shelf-stable… I know a shelf-stable cream cheese frosting is possible, but my guess is that yours is not quite there. That’s just a guess though.

I am curious about the 5,000 sale limit of each product. What if I sold Sugar cookies and were shaped and decorated a different way? Would that fall into all the same sugar cookie product or would they each be different??

    I think different shapes would be the same product, since it’s the same recipe. But if you get creative, you could probably pretty easily expand your sugar cookie business. For instance, you could simply switch the extracts used for different products… you could have “Lemon Sugar Cookies”, “Almond Sugar Cookies”, etc.

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