On June 25, 2020, Mississippi Governor Tate Reeves signed H.B. 326 into law, making it possible for cottage food businesses to advertise and sell online, including via social media. McLaughlin, PC supported passage of this important bill and we thank its sponsors: Representatives Eure, Eubanks, and McLean.
Anna Smithhart reached out to McLaughlin, PC after some of her baking proved to be a hit with friends around Valentine’s Day. She says she’s always enjoyed baking, but got “obsessed” with decorating cookies.
“I didn’t really think it would get to what it is,” she said. “I got 10-15 orders in one week and I just got hooked.”
Soon she was taking on challenging products and baking at home for extra income. Smithhart is a trained pediatric occupational therapist, but currently a stay-at-home mom in Madison, Miss., raising two girls—18 months and 3.5 years of age. Being able to generate income “during naptime and after bedtime” made baking at home an appealing option.
What Smithhart didn’t know was that by selling the cakes and cookies she baked, she was entering something regulated in Mississippi—the cottage food industry—and that she was going to have to play by some strict rules.
Those rules included limits on the amount of revenue she could generate, the fact that she could only cook or bake in a kitchen attached to her home, and that she couldn’t advertise on the Internet. And “advertising” includes posting photos on Instagram or Facebook for free and letting people know they’re for sale.
“I take orders, mostly word of mouth. If somebody is at a party I do, I leave business cards and I have branded boxes,” she said. “Somebody told me that you need to be careful online—local bakers get turned in for advertising on Instagram—I didn’t realize that was against the law.”
Smithhart enlisted attorney Conner Reeves, a long-time friend, to make sure she “dotted her I’s and crossed her T’s,” she said, starting an LLC and getting up to speed on cottage-food law. She also knew McLaughlin, PC was lobbying the Mississippi Legislature on behalf of the cottage food industry and wanted to support that effort.
“We’re really appreciative of Conner and Matthew and their firm, along with Representative Eure who brought it back up for a vote,” she said. “It supports small businesses, especially this year when everyone has been so affected economically.”
Thanks to H.B. 326, as of July 1, 2020, cottage food businesses can advertise online, including via social media. The law also raises the annual cap on revenue from $20,000 to $35,000.
Smithhart says that she and her husband, a medical doctor, hope that the extra proceeds from her cottage food business can help them tackle student debt and save for their daughters’ education.