First off...
from sunny South Florida!
Secondly, laws concerning growing, manufacturing, etc., by and large vary from state to state. A cursory look shows that Iowa has now restrictions against the sale of pepper based products:
http://cottagefoods.org/laws/usa/iowa/. So you will not run into any laws state-wise. If you're using some sort of commercial kitchen or commercially built facility, even better, since in general, anything made at home is required to be labeled as such.
I know that getting a Process Authority is a big plus. They're FDA certified labs that test your product to make sure there isn't anything potentially dangerous in them, and some can also do nutritional value labels for the, All they need is one fully packaged item of each thing you want tested. You only have to send each item once, and only need to re-send it if you change the recipe in any substantial way.
Also, if it's superhot stuff, one thing to put up as a disclaimer is to say that the items in question are extremely hot, and by purchasing them, whoever does so agrees that they are hot and your dad's company isn't liable for acts of stupidity.
That's all I can think of right now... There's no shortage of others here, from all over the world (no joke), that have plenty of info to add.