Hi Diana,

This is a good question. The issue with pepper jelly is that it is a vegetable and that means it is a low acid food. That requires pressure canning to safely preserve a low acid food. In our program we let people know that pepper jelly is not able to be sold as a cottage food. We also let them know they have to only use and follow tested recipes. I know that the University of Georgia retracted their pepper jelly recipe several years ago, due to questionable safety because it is a low acid food. 
I will ask an inspector just to be sure, but currently pepper jelly of any kind can not be sold under the Michigan Cottage Food law.

Thank you for your question!

Karen Fifield

Food Safety Extension Educator