Rhode Island shuts down down moms for selling home‐baked cookies. This makes no sense, and wastes precious law enforcement resources that should be devoted to fighting violent crime, theft, and fraud.
The internet has made working from home much easier. Yet, states and cities often strangle home-based businesses, forbidding them even when a pandemic makes it hard for workers to work anywhere else than the home.
As economist Chris Edwards notes:
The pandemic has created lasting changes to the economy. More employees are working from home, videocalls are replacing business travel, and home‐based entrepreneurship is booming. The internet is a key driver of home entrepreneurship—the number of arts‐and‐crafts businesses on Etsy.com, for example, jumped from 2.6 million in 2019 to 7.5 million by 2021.
Another thriving area of internet‐driven entrepreneurship is home‐based food production for retail sale, often called the cottage food industry. Popular cottage foods include baked goods, canned goods, pickled goods, chocolates, candies, jams, fruit pies, honey, and pasta.
Home‐based food businesses offer entrepreneurs cost savings and lifestyle advantages. Aspiring entrepreneurs may not be able to pursue their dreams if they have to rent commercial kitchen space and pay for childcare and commuting. Homes are a low‐cost incubator to test business ideas before making larger investments. The vast majority of commercial craft brewers, for example, got their start brewing at home.
However, cottage food industry growth faces a major barrier: government health and zoning rules that ban, restrict, or raise costs for home‐based businesses, as I discuss here. State and local rules vary widely regarding food items that can be sold, where they can be sold, and the sales volume allowed. At one end of the freedom spectrum, Wyoming home businesses can sell any type of food except meat within an annual sales limit of $250,000. At the other end of the spectrum, Rhode Island only allows farmers to sell food made in their homes, and even sales from farmers are tightly restricted.
The New York Times on Monday profiled the rise in internet sales of food produced by small businesses, including home businesses. The article captures the tension between restrictive regulations and the desire of individuals to earn a living from their passion for food…overly restrictive rules … strangle nascent entrepreneurship and undermine the economy. Harvard Law School’s Food Law and Policy Clinic profiled Mark Stambler, who was shut down by Los Angeles County for selling bread made in his home. Stambler fought back and was successful in getting local cottage food laws liberalized. His business grew, he won baking awards, and he ultimately founded a successful brick‐and‐mortar business. The Harvard researchers noted that because “Mark was able to start his business out of his home kitchen, he was able to test the market for his product and take a risk that ultimately led to a very successful business.”
More at this link.
