Brian Holland, 29, of Corte Madera was booked into the Marin County Jail late Saturday on two counts of suspected child endangerment and one count of manufacturing a controlled substance, the Central Marin Police Authority reported.
Investigators said that Holland was converting marijuana into a wax form, which is becoming popular for its high potency.
The process requires butane gas, and investigators said it appears Holland was working close to the heater's pilot light in the small apartment, which caused the flare-up.
Holland sustained a minor burn and was taken to a local hospital for treatment before being booked into jail, police said.
Holland's two children, ages 2 and 4, were not harmed by the fire that scorched the living room carpet, police said.
Investigators seized 24 cans of butane gas, more than two pounds of marijuana and other items, police said.
Marin County Chief Deputy District Attorney Barry Borden said Monday that Holland is due in court for arraignment on Aug. 21. It was not known whether Holland had retained an attorney.