How red tape is preventing one Minnesota baker from expanding her business

When we talk about taxes and regulations, and how they affect the economy, it is easy to get caught up in the numbers on things like GDP and overlook the human element of the issue. But the economy isn’t an abstract concept. It is made up of real people who decide every day to buy and sell things. And it is these people whose lives are made more difficult by regulations and taxes.

Consider this story that Adriane Lepage shared on MinnPost about her struggles with trying to sell homemade bread to other business establishments in Minnesota. As she explains, Adriane started baking for family and friends in 2021 after her brother died of cancer. After some time, neighbors started paying her for the bread she was making. The hobby then developed into a micro-bakery, which she has been running at home.

Since 2015, Minnesota has allowed the sale of homemade shelf-stable foods like bread and cookies. However, there are some restrictions to that. And here is where the problem lies, as she describes.

I can take online orders and make in-person deliveries. Or I can sell my bread at farmer’s markets and community events. But if I want to offer the same loaves at coffeeshops, cafes and co-ops in my community, I am stuck. Minnesota bans business-to-business distribution of “cottage food,” which refers to homemade food prepared for sale.

Local restaurant owners have approached me about partnerships. They would love to present my sourdough bread on cheeseboards or serve it with soups and sandwiches, but I must decline. To comply with Minnesota law, I would have to become a licensed food establishment.

This would mean abandoning my kitchen and building a commercial kitchen for thousands of dollars. Or I could lease space from someone else, and travel miles away every time I wanted to bake.

Regulations are bad for the economy precisely because they make it hard or costly for people to sell things that they produce to other people who would like to buy them. Ultimately, everyone is made worse off as a result.

The story of Adriane illustrates that perfectly well.