Where wholesale is allowed — Un-Factory Foods™

Wholesale-open is not one thing. Several states open retail but close restaurants, or open restaurants but exclude grocery. The distinction decides which accounts a maker can actually pitch.

The most common planning error is treating "wholesale-open" as a binary. It isn't. Several states split the retail channel from the restaurant channel, and a maker who signs a café in the wrong state has signed an unlawful account.

The splits that matter

State	Retail / grocery	Restaurants / bars
Oregon	Retail stores and coffee shops	Prohibited — also excludes wholesalers, distributors, institutions
Tennessee	Retail stores and grocery	Prohibited
Arkansas	Retail and grocery via third-party vendors	Prohibited — not an "approved source"
District of Columbia	Retail channel excludes grocery stores and restaurants	Wholesale to licensed food establishments permitted
Maryland	Retail food stores, after MDH label review and written approval	Not permitted under cottage law
Oklahoma	Designated agent or third-party vendor, e.g. retail or grocery	Not enumerated — packaged resale defensible; ingredient use triggers a menu advisory
South Carolina	Retail including grocery	Packaged product only; ingredient use requires an SCDA operational variance
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DC is the most counterintuitive: its retail channel explicitly excludes exactly the accounts most people assume "retail" means, while its wholesale channel — added by D.C. Law 26-7, effective 10 June 2025 — permits sales to licensed food establishments.

Fully open channels

These states permit both retail and food-service accounts:

Ohio — wholesale to licensed retail food establishments and food service operations (ORC Ch. 3717 licensees). Covers grocery and bars/restaurants both.
Texas — since SB 541, non-TCS foods may be sold wholesale to a registered cottage food vendor who resells at farmers markets, farm stands, food service establishments, or any retail store.
New York — wholesale and retail permitted, including to restaurants, cafés, and grocery stores within the state.
Wyoming — indirect sales of non-potentially-hazardous food through retail stores and restaurants, under the Food Freedom Act.
North Carolina — retail stores, distributors, and restaurants. See below.
Alaska — non-PHF may be sold through an "agent," and agents expressly include gift shops, convenience stores, grocery stores, coffee shops, and restaurants.
Massachusetts — but only under a Wholesale Residential Kitchen license from MA DPH. The local-board-of-health Retail Residential Kitchen permit is direct-only.
Virginia — the Home Food Processing Operation application explicitly asks for the percentage of products sold wholesale for resale. Note Virginia's separate Home Kitchen Food Processing Exemption is direct-only.
Pennsylvania — the Limited Food Establishment application has a "Wholesale only / Both Retail and Wholesale" checkbox.
Georgia — since HB 398, producers may sell to consumers directly or to retail food sales establishments including grocery stores, convenience stores, or restaurants.
Hawaii — wholesale and third-party sales of non-TCS foods, since Act 195 effective 24 August 2025.
Arizona — non-TCS products through retail food establishments and third-party vendors. TCS foods remain direct-only.
Utah — cottage foods may be sold retail or wholesale within the state. Utah's separate Homemade Food Act path is direct-only.

North Carolina is open — most aggregators say otherwise

The widely repeated belief that North Carolina is direct-only is wrong, and several aggregator sites still carry it.

The official NCDA&CS Home Processor page and NC State Extension both state that cottage-kitchen processors may sell "to retail stores, restaurants, or directly to consumers." The application's Step 7 requires labels when products are "sold wholesale to retail stores, distributors, or restaurants."

North Carolina has no revenue cap, no license fee, and no permit. What it does have is a pre-operational kitchen inspection with an 8–12 week wait, and the strictest pet rule in the country.

Three states that opened very recently

Not yet reflected in most published lists:

Texas — SB 541, effective 1 September 2025
Georgia — HB 398, effective 1 July 2025
Hawaii — Act 195 / HB 2144, effective 24 August 2025

DC (June 2025), Alaska (2024), and Oklahoma (2024) also changed recently.

Merchandising rules attach to the account, not the maker

Three states constrain how a retailer may display the product, which is a conversation to have with the buyer, not the maker:

Wyoming — HB 84 subsection (k): the food "shall not be displayed or offered for sale on the same shelf or display as food produced in a licensed establishment."
Oregon — the required disclaimer states product "must be stored and displayed separately if merchandised by a retailer."
Georgia — cottage products must be in a separate, clearly labeled section.

Georgia adds a further trap: under O.C.G.A. §26-2-478, each city or county may pass an ordinance prohibiting cottage food operators from selling through third-party vendors. Check the local code before pitching a retail buyer in Georgia.

Closed for non-obvious reasons

Rhode Island — wholesale, consignment, and sales to grocery or restaurants are all expressly prohibited. The program also covers "nonperishable baked goods only."
North Dakota — food-freedom law with interstate provisions, but the statute requires food be "consumed within a private home." Commercial resale is not permitted.
Montana — food freedom, no cap, but direct-to-consumer only.
Colorado — even after HB26-1033, wholesale to retail and interstate shipping remain unauthorized.
Washington — direct in-person only; wholesale requires a Food Processor License and a commercial kitchen.
Wisconsin — baked goods only following the 2024 Court of Appeals decision.