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Who Needs a License?

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Companies buying or selling produce in wholesale quantities, which means one (1) ton or more in any one day, must be licensed. The company must also be involved in "interstate commerce." This is defined broadly, and basically means the produce, at some point in its commercial life, crosses a state line. So, most companies involved in buying or selling produce must be licensed.

There are a few exceptions: growers; retailers who buy less than $230,000 per year; frozen food brokers who are independent agents and sell less than $230,000 per year of produce; processors (other than potato processors) who buy produce for processing solely within the state in which the produce is grown; and restaurants (unless a restaurant group has a separate entity that buys produce and resells it to the individual restaurants).

If a company should be licensed, but does not obtain a license, it is still subject to PACA rules, just as if it were licensed.

If PACA thinks a company needs a license, it sends a letter advising the company either to obtain a license or explain why a license is not needed.

A company, which obtains a license, though not required to do so, is subject to all PACA rules. However, obtaining a PACA license has the benefit that a licensee more easily preserves its trust rights by using its invoices, as explained under The PACA Trust.