Oregon Cottage Food Exemption: What a Home Kitchen May Sell Unlicensed

Read ORS 616.723(2) as a five-part test, because failing any one item costs the whole exemption. Paragraph (a) requires the food establishment to be located in a residential dwelling. Paragraph (b) requires the foods prepared for public distribution to be packaged and not potentially hazardous, and ORS 616.723(1)(b) defines potentially hazardous as requiring temperature control due to the capacity to support the rapid and progressive growth of infectious microorganisms or the growth of toxic microorganisms. The statute then lists what qualifies: baked goods, confectionary items, coffee beans, teas, popcorn, jams, jellies, honey, syrups, fruit butters, nut mixes, repackaged freeze-dried foods, repackaged dried and dehydrated foods and powdered drink mixes. ORS 616.723(1)(a) also carves cannabis out entirely by providing that "food" does not include any article containing cannabis.

The department has tightened several of those categories by rule. OAR 603-025-0320(1)(c), as printed in the Secretary of State filing for administrative order DOA 95-2026, permits jams and jellies made only with fruit that has a natural pH of less than 4.60 and applies the same pH ceiling to fruit butters, limits honey products, dried tea, spice and seasoning blends, repackaged freeze-dried food, repackaged dried and dehydrated food and powdered drink mixes to those made using commercial food, and adds freeze-dried confectionary items. The same rule at OAR 603-025-0320(1)(d) sets the sanitation conditions: separate closed storage for ingredients, containers and labels, separate refrigerated storage for perishable ingredients, a separate storage area for household cleaning chemicals, no medical supplies or equipment in the kitchen, and no processing while pets are present or while other domestic activities are under way, a list that expressly names family meal preparation, dishwashing, clothes washing or ironing, cleaning of floors, walls, cabinets or appliances, and entertaining guests.

The sales cap is the number most often quoted wrongly. ORS 616.723(2)(d) prints $50,000 but attaches an annual inflation adjustment tied to the Consumer Price Index for All Urban Consumers, West Region (All Items), published by the Bureau of Labor Statistics and rounded to the nearest $100, and ORS 616.723(9) makes that adjustment a duty rather than an option. Administrative order DOA 95-2026, filed with the Secretary of State on March 13, 2026 and effective the same day, amended OAR 603-025-0320 to raise the limit from $51,200 to $52,700, citing a 2.9 percent advance in the West all items CPI-U for the 12 months ending December 2025. Anyone planning against the statutory $50,000 is planning against a figure that has not been current for years, and ORS 616.723(11) requires the operator to maintain accurate records of annual sales and the types of foods produced, keep them for not less than three years, and make them available for inspection by the department on request.

Who you may sell to is set by three subsections that pull in different directions. ORS 616.723(4) is the permissive one: a person may sell exempt foods directly to the end user in any manner, including from the home, online, through the mail and at events. ORS 616.723(5) allows wholesale to a retailer if the retailer agrees to store and display the foods separately from other foods and to clearly indicate in displaying them that they are homemade and not prepared in an inspected food establishment, and ORS 616.723(1)(c) defines retailer to include coffee shops and to exclude restaurants. ORS 616.723(3) then closes the institutional channel: an Oregon cottage food operator may not sell to an institution including a caterer, school, day care center, hospital, nursing home, correctional facility or restaurant.

The label is prescribed word for word. ORS 616.723(6)(a) requires the statement "This product is homemade, is not prepared in an inspected food establishment and must be stored and displayed separately if merchandised by a retailer," and lets the department adopt alternative wording only to the extent necessary to comply with federal requirements. ORS 616.723(6)(b) adds eight required disclosures: the name and phone number of the food establishment; its address or the unique identification number issued under subsection (7); the product name; the ingredients in descending order by weight; net weight or net volume; applicable allergen warnings under federal labeling rules; product nutritional information in federal form if any nutrient content or health claim is made; and the presence of pets in the residential dwelling, if any, and the potential for pet allergens. ORS 616.723(7) lets an operator ask the department for a unique identification number instead of publishing a home address, and permits a reasonable fee to cover administering that.

Pets are handled deliberately rather than by silence. ORS 616.723(10) bars the department from prohibiting a food establishment in a residential dwelling, including one licensed as a domestic kitchen, from selling foods on the basis that pets live there, while requiring the department to prohibit pets from the food preparation area. That pairing is why the pet-allergen disclosure exists in the label rule. Training is not waived either: ORS 616.723(2)(e) requires every individual involved in preparing food for public distribution to have completed a food handler training program and to hold a certificate issued under ORS 624.570, the same certificate an Oregon restaurant worker carries.

One further layer sits above the state scheme. ORS 616.726(1) permits any city to enact and enforce its own food establishment ordinance with licensing and inspection services inside its corporate limits, provided the ordinance is at least equal to ORS 616.695 to 616.755, and requires the city to forward a copy of each ordinance and amendment to the State Department of Agriculture. ORS 616.726(2) makes the department investigate that ordinance not less than once every two years, and ORS 616.726(3) restores state jurisdiction over every food establishment in the city if the department finds, at least 30 days after written notice, that local enforcement continues to fail.

The cottage food exemption is conditional, so losing a condition converts the operation into an unlicensed food establishment. ORS 616.706(1) requires a license before operating a food establishment, and ORS 616.723(8) lets the State Department of Agriculture require a food establishment otherwise exempt under subsection (2) to become licensed under ORS 616.695 to 616.755 if it refuses to comply with department rules requiring that it be constructed and maintained in a clean, healthful and sanitary condition.

Where authorization is required and absent, ORS 616.713(2) gives the department power to order the closure of a food establishment, on top of its condemnation and closure authority elsewhere in the chapter. ORS 616.992 sets the criminal exposure for violating any provision of ORS chapter 616 or any rule adopted under it: a Class B misdemeanor for a first offense and a Class A misdemeanor for a second or subsequent offense. ORS 616.997(1) adds a civil penalty, available in addition to those criminal penalties and to any penalty under ORS 561.190, for violating the chapter, its rules or a closure order issued under ORS 616.713, and ORS 616.997(2) caps that penalty at $10,000 for each violation. Each day a violation continues past the compliance deadline counts as a separate violation under ORS 616.997(1) unless the department finds a different period more appropriate.

The appeal route is short and it is the operator who must move quickly. ORS 616.997(3) requires civil penalties to be imposed in the manner provided by ORS 183.745, except that the written application for a hearing must reach the department no later than 10 days after the notice of civil penalty is mailed or personally served, which is shorter than the ordinary contested-case window under ORS chapter 183. Penalty money is deposited in the General Fund to the credit of the Department of Agriculture Account under ORS 616.997(4). Selling to a restaurant, caterer, school, day care, hospital, nursing home or correctional facility is a direct violation of ORS 616.723(3) rather than a licensing question, and exceeding the inflation-adjusted sales limit in OAR 603-025-0320(1)(e) simply removes the exemption from the moment the threshold is crossed.