Business
The Cannabis Industry’s New Best Friend? President Trump
By some measures, the legal cannabis industry is flowering. It has grown to around $30 billion today from less than $20 billion just six years ago. But investors have remained wary of its high taxes, marijuana’s illicit status at the federal level and the operational costs of complying with a patchwork of state regulations.
Now the Trump administration is pushing major policy changes that could hand marijuana companies a huge windfall and unlock new investment in the industry.
Last week, the government relaxed federal controls on medical marijuana. While that does not make medical marijuana legal under federal law, it moves the product from a class of highly addictive drugs, such as heroin, to a category of lower-risk medicines, like prescription Tylenol, that are overseen by the D.E.A. The Trump administration has also started a process to reclassify cannabis more broadly.
For some cannabis businesses, reclassification could cut tax bills in half. Companies that sell marijuana are currently taxed largely on their income, rather than their profits, resulting in effective tax rates of around 70 percent, more than double those of other businesses. Under the new category, those licensed to sell medical marijuana can claim common tax deductions for expenses like rent and payroll, according to accountants and tax lawyers. A broader reclassification would do the same for recreational marijuana.
The Treasury is considering making the tax relief retroactive, which would be a boon for the industry. Legal cannabis companies owed the Internal Revenue Service $2.24 billion in 2025, according to Whitney Economics, a cannabis research firm. A handful of publicly traded companies, including Trulieve, Florida’s largest medical cannabis company, and Curaleaf, a global juggernaut based in New York, owed more than $1.6 billion in federal taxes, according to their financial disclosures.
It is unclear how the change would be put in place and how extensively businesses would benefit. The Treasury and Internal Revenue Service have yet to issue guidance, though the Drug Enforcement Administration has begun allowing businesses to register with the agency. And there are questions about how the many businesses that sell both medical and recreational cannabis will be treated.
“I’m ecstatic that this happened,” Joe Andreae, the chief executive of CULTA, a cannabis company in Maryland that sells both recreational and medical marijuana. “But it creates a challenge. Will they force us to actually delineate?”
Despite the confusion, and the exclusion of recreational marijuana, many in the industry have welcomed the administration’s acknowledgment of the medical benefits of cannabis as a meaningful first step toward broader reform and public acceptance.
Patrick Rea, the managing director of Poseidon, a cannabis-focused venture capital firm, said the tax relief will make the industry more attractive to investors. “The upshot here for investors is that you can invest and get a return,” he said.
A windfall in sight
Nationally, cannabis businesses are facing rising supply-chain costs, and a glut of legal crops is driving down prices. Beau Whitney, an economist specializing in cannabis, said that 24 of the 40 states that have legalized medical or recreational marijuana, or both, saw revenues decline in 2025.
A big tax break could offer significant help. Austin Ownbey, a Washington, D.C.-based partner at Akerman LLP, said the tax break will make some businesses profitable or more profitable.
Many cannabis companies have delayed filing taxes in anticipation of rescheduling. Jeffrey Schultz, a cannabis lawyer at Foley Hoag LLP in New York, said that he was advising clients who have been granted extensions from the I.R.S. to consider holding off longer, while telling those that have filed already to think about amending their returns. “They may not owe that money,” he said.
Paying less in taxes could help cannabis companies fund research required for marijuana to gain approval from the Food and Drug Administration, which would make it legal to prescribe at the federal level.
The chief executives of Trulieve, Curaleaf and Tilray, a New York-based alcohol and pharmaceutical company with cannabis operations in Canada, said in interviews that they wanted to invest in research to gain approval for cannabis-based treatments for cancer, nerve pain and seizures.
Kim Rivers, the chief executive of Trulieve, said rescheduling cannabis was a long overdue step that recognizes how much the industry has evolved. Rivers was instrumental in persuading President Trump to issue an executive order last December directing the Department of Justice to quickly reclassify marijuana.
“This is not some plants in a closet or on a dirt floor,” she said in an interview. “This is real, regulated, highly nuanced business. Millions of Americans are finding relief and want to have assurance that these products are backed by real research in the United States.”
Left out
It came as a surprise to many in the industry that recreational marijuana was left out of the initial rescheduling. Shawn Hauser, the co-chair of the cannabis practice at Vicente LLP, based in Colorado, said the treaty powers that the Trump administration used to bypass the bureaucratic rule-making process allowed the reclassification only of medical cannabis.
The Trump administration is seeking the same change for recreational marijuana at a hearing scheduled to begin on June 29. But it is certain to be opposed by anti-legalization groups like Smart Approaches to Marijuana, which led opposition that ultimately derailed an earlier attempt to reschedule marijuana under President Biden.
Businesses that sell cannabis solely for adult recreational use are worried that the new rules for medical marijuana could put them at a competitive disadvantage.
That includes Beak & Skiff, a 115-year old apple orchard in New York that makes a line of cannabis and hemp products called Ayrloom. In addition to the possibility of being excluded from rescheduling, the company is preparing for a looming national ban on hemp products containing more than .4 milligrams of THC per container. For Beak & Skiff, the ban would reduce the number of states in which it sells hemp from 13 states to just one, New York.
“It feels like we’re just getting crushed in the middle of two things,” Eddie Brennan, the company president, said.
Hurdles remain
Moving medical marijuana to a lower-risk category does not make it legal, which would require either an act of Congress, F.D.A. approval or removal from the federal controlled substances list. Companies will still contend with the legal risks associated with cannabis that have kept banks, institutional investors and insurance companies on the sidelines, leaving them with limited access to financial services and higher borrowing costs.
The effect can be seen at the dispensary register, where consumers are required to pay with cash or PIN debit because major payment processing companies like Visa and Mastercard do not allow cannabis transactions. Even the Drug Enforcement Administration is requiring the medical cannabis businesses now seeking federal registration to submit their application fees using PayPal or bank transfer.
Efforts in Congress to pass legislation providing protections for federally regulated financial institutions that serve state-licensed businesses have been unsuccessful so far.
It is also unclear how rescheduling will interact with state laws.
“There’s just a lot of questions, a lot of murkiness,” Whitney, the economist, said, adding: “The devil’s in the details.”
IN CASE YOU MISSED IT
Spirit Airlines is preparing to shut down. The distressed airline, which has filed for bankruptcy twice in the last two years, had been hoping to secure a $500 million loan from the government before running out of funds. But the deal fell apart as some of Spirit’s investors and some Republican lawmakers opposed it.
Fed drama continued. Kevin Wash, Trump’s nominee for Fed chair, cleared an important Senate Banking Committee vote and is expected to be confirmed in time for the next Fed meeting in June. The Fed voted on Wednesday to keep rates unchanged at a range of 3.5 to 3.75 percent, and the current chair, Jerome Powell, announced that he will break with tradition to remain a governor at the central bank after his term as chair ends on May 15.
A.I. spending set a record. Google, Amazon, Microsoft and Meta reported more than $130 billion in quarterly capital expenditures on Wednesday, about 70 percent more than they spent in the same quarter last year.
The F.C.C. ordered a review of ABC’s broadcast licenses. The extraordinary order came amid a fight between President Trump and Jimmy Kimmel over a joke by the late-night host and represented an escalation by the Trump administration to punish media outlets for their coverage. It faces long odds in court.
More big deals: Bill Ackman’s new fund had a lukewarm I.P.O. PayPal is said to be spinning out Venmo. G.D.P. grew 2 percent in the first three months of the year. And the Senate banned its members from trading on prediction markets.
Taylor Swift’s deepfake defense
A.I. threatens the business of being a celebrity, and Taylor Swift’s legal team just set up a new layer of defense. Last week, the artist filed applications to trademark snippets of her voice and a photo of herself, which lawyers who specialize in intellectual property say could help build a legal argument against unauthorized deepfakes. The actor Matthew McConaughey has made similar moves.
DealBook’s Sarah Kessler talked with Josh Gerben, the head of a trademark-focused law firm that was one of the first to point out the applications, about Swift’s legal strategy. The conversation has been condensed and edited.
How do these trademarks potentially help in a case over deepfakes?
One potential defense is right to publicity law, which basically says, I can’t put Taylor Swift’s image on a T-shirt and go sell it, because that would violate her right to exploit her name, image and likeness. If I were to take her voice and make a new song, I’m arguably violating her right to publicity.
But courts haven’t really looked at this yet. So we’re not sure how they would view it.
Now you’re also trying to trademark the voice to have another cause of action, where you could say, by using my voice, you’re also violating my trademark rights.
Is there something about trademark law that makes it particularly useful in this context?
Trademark law gives you the ability to police against anything that’s confusingly similar. So it doesn’t even have to be an identical copy, or it doesn’t have to actually be Taylor or her voice. It could just be something that’s similar to that. So it’s arguably a little bit of broader protection.
Why haven’t we seen a big lawsuit over celebrity deepfakes yet?
It looks like everybody’s kind of setting up. You’re going to be testing novel legal theories and you want to make sure that if you’re actually going to spend the time and money to litigate it, that you have a really good chance of setting a good precedent.
Because the last thing you want to do is lose and set a bad precedent, where then it just becomes kind of open season on your intellectual property.
Are your clients worried about this?
Even brand owners are starting to pay attention, because you could use A.I. to create fake advertisements that say something that’s untrue or derogatory about a brand.
Quiz: Palantir’s new merch
This question comes from a recent Times article. Click an answer to see if you’re right. (The link will be free.)
On Thursday, the technology company Palantir added a new product to its online store that Eliano Younes, the company’s head of strategic engagement, told The Times was intended to demonstrate a commitment to “re-industrializing America.” What was it?
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Business
Legal brawl that helped tank Jeff Shell’s Paramount career ends
The strange legal saga that torpedoed Jeff Shell’s career at Paramount Skydance has ended with a whimper.
An attorney for Las Vegas gambler and self-styled “fixer” Robert James “R.J.” Cipriani has asked a Los Angeles County Superior Court judge to dismiss the scorched-earth lawsuit he brought against Shell in March. Cipriani had been demanding $150 million for allegedly providing “sophisticated, high-value crisis communications services, entirely without compensation” to Shell over 18 months.
Shell’s attorneys separately filed court documents to withdraw a counter-lawsuit against Cipriani.
The bitter feud captivated Hollywood earlier this year after Cipriani went public with his grievances against Shell, whom he met nearly two years ago through powerlawyer Patricia Glaser.
Glaser had arranged a meeting in August 2024 between Cipriani and Shell, the former chief executive of NBCUniversal. At the time, she and Shell suspected Cipriani was behind an online whisper campaign to spread rumors about Shell just as he was trying to mount a comeback at Paramount.
A year earlier, Shell had lost his job as NBCUniversal’s chief executive over an inappropriate relationship with an underling.
Cipriani claimed Shell turned to him for protection against potential bad publicity. In his lawsuit, Cipriani alleged that during months of on-again, off-again conversations, Shell dished sensitive information to him, including that Paramount was poised to strike a $7.7-billion deal to bring UFC fights to Paramount+.
Cipriani also alleged Shell had reneged on a promise to help him develop a show at Paramount as compensation for his occasional work.
Shell has long maintained that he never made such a promise. He contends Cipriani, a self-professed whistleblower who goes by the handle RobinHood702 (the Las Vegas area code), was trying to shake him down.
“I didn’t pay this guy a cent,” Shell said Thursday. “From the very beginning, I wasn’t going to pay him a cent.”
Earlier this spring, Paramount conducted an external review into Shell’s conduct and found no violation of securities laws.
Robert James “R.J.” Cipriani in Amazon Prime Video’s 2025 series, “Cocaine Quarterback.”
(Courtesy of Prime)
The nasty spat culminated in April when Shell agreed to resign as president of Paramount Skydance to concentrate on his legal headache.
At the time, Cipriani had widened his lawsuit to include Shell’s wife, Laura, and tech billionaire Larry Ellison, whose son David Ellison runs Paramount. Cipriani named others, including the Ellisons’ investment partner, RedBird Capital Partners. Cipriani’s lawyer subpoenaed entertainment and sports executive Ari Emanuel to get testimony to advance the beef.
Shell and Paramount’s lawyers fought back, demanding sanctions be leveled against Cipriani for an alleged overreach.
On Tuesday, Cipriani’s attorney Steven J. Aaronoff filed a request for “a dismissal of the entire action, with prejudice, as to all parties and all causes of action … against all named Defendants, including Jeff Shell, Laura Shell, Paramount Skydance Corp., RedBird Capital Partners LLC, David Ellison and Lawrence J. Ellison.”
Cipriani and Aaronoff were not immediately available for comment.
On Thursday, Glaser declined to comment. The veteran litigator found herself in hot water after her efforts to broker a detente between Cipriani and Shell spectacularly backfired.
Staff writer Stacy Perman contributed to this report.
Business
Commentary: The right-wing attack on science reaches a nadir, but it could get worse
The tally from Trumpian attacks on science now includes billions of dollars in damage to farmers and ranchers and assaults on scientists’ freedom of speech
One of the rules I came to live by during my years of covering global trouble spots is: “Never assume that things can’t get worse.”
But it will be hard to find a worse display of shameful servility to the Trump administration by a scientific organization than the American Diabetes Association provided on Friday.
During the organization’s annual conference in New Orleans, five of its leading members — four former presidents and the current editor of Diabetes Care, its official journal — were distributing paper copies of an editorial from the journal decrying the administration’s aggressive attack on scientific research and funding.
The seeming endorsement by the ADA of the current administration’s approach to science and of its attacks on freedom of speech is unconscionable.
— Open letter to American Diabetes Association
Suddenly they were confronted by security guards and New Orleans police and manhandled out of the hall. (A video is here, courtesy of MedPageToday.)
Their papers were confiscated. They were ordered to surrender their passes and were informed that if they tried to reenter the hall they would be arrested for trespassing.
“We printed 1,000 copies of the editorial, at my personal expense, and we hoped that 200 people who hadn’t seen it would read it,” Steven Kahn, director of the Diabetes Research Center at the University of Washington, editor of the journal and the lead author of the editorial, told me.
Instead, the editorial has become a must-read, with tens of thousands of page views and widespread condemnation of the conference organizers’ actions.
An open letter to the ADA started by David Nathan of Massachusetts General Hospital, titled “Shame on You” and stating that “the seeming endorsement by the ADA of the current administration’s approach to science and of its attacks on freedom of speech is unconscionable” has more than 6,400 signatories on change.org as of this writing.
The Diabetes Association implied in an official statement that the scientists had breached IRS regulations that include “maintaining a strictly nonpartisan environment at all organizational events.” On Wednesday, the organization said it would commission “a thorough independent review of the events that occurred.”
The organization’s action underscores one reason why the Trump administration’s wholesale attack on scientific research has reached a level that, as I’ve written, will have generational ramifications: It’s because some of our most august scientific organizations have failed to stand up for principle.
“It’s part of a larger systems failure among the academic medical centers, research universities, scientific and professional societies and the National Academies,” says Peter Hotez of Baylor College of Medicine, a vaccine expert and veteran adversary of pseudoscience.
The attention given to individual incidents such as the ADA conflict obscure what Hotez calls “the greater reality … a much darker MAHA strategy to tear down American biomedicine.” The goal, he says, is to supplant independent academic research with “an entire system of pseudoscience and grift.” MAHA is the administration’s acronym for “Make America Healthy Again.”
The latest iteration of this effort came late last month with a rule proposal from the Office of Management and Budget, which is headed by the arch-conservative Russell Vought, that would in effect make all scientific grant applications subject to the oversight of politically-appointed commissars.
Among other provisions, grants would be rejected if they’re judged to “fund, promote, encourage, subsidize, or facilitate … diversity, equity, and inclusion” or “gender ideology” such as “theories or ideologies that deny the biological reality of sex or the sex binary in humans.”
The OMB proposal finally stirred major scientific bodies to speak up. “This latest move is a brazen power grab,” the American Association for the Advancement of Science said through its chief executive, Sudip Parikh. “If this rule becomes final, Americans’ hopes for future cures, national security and economic strength will rely on the scientific sensibilities of the nation’s chief bureaucrat.”
As it happens, the OMB proposal dropped just as the economic consequences of the extremist war on science were becoming clearer than ever.
Among the thousands of grants and programs that perished when the administration dismantled the U.S. Agency for International Development, for example, was a program monitoring the advance of the New World screwworm north from Central America.
The screwworm, which has the capacity to devastate cattle and sheep herds, has now appeared in Texas, where its costs could be enormous. Just last year, the Dept. of Agriculture calculated that the eradication of the pest in the U.S. in the 1990s yielded annual economic benefits to producers of an inflation-adjusted $1.7 billion a year to the cattle industry and $6 billion a year to the broader economy. A new outbreak, the USDA estimated, could cost the Texas economy $1.8 billion.
Then there’s measles. The Centers for Disease Control and Prevention reports 2,030 U.S. cases this year as of June 4, almost as many as were seen in all of 2025 (when there were 2,288, including three deaths), the worst outbreak since 1991. This is the harvest of the anti-vaccine ideology being spread by Health and Human Services Secretary Robert F. Kennedy Jr.
The outbreak’s consequences can be measured in dollars and cents: Responding to an outbreak of as few as 600 cases could cost local agencies $10 million, according to healthcare researchers at Johns Hopkins University.
The Trump administration has proposed slashing the budget of the grant making National Science Foundation by 61% and of the National Institutes of Health by 40%. The budget of the CDC, which once reigned as a global gold-standard for public health oversight but has suffered from the disdain of RFK Jr. and his minions, would be cut by 44%.
Taken together, these cuts “would shrink the economy by $1 trillion compared with maintaining the 2025 level of R&D,” reckons the Information Technology and Innovation Foundation, a science and tech think tank.
What frightens scientists more than the sheer numbers are that the cuts are arbitrary and manifestly pernicious. A study published last year in JAMA Internal Medicine identified 383 NIH-funded clinical trials that the administration terminated, leaving more than 74,000 participants high and dry.
“Scientific investment is not a cost to be minimized,” Henry Miller, a former biotech official at the Food and Drug Administration, observed recently; “it is an engine of national wealth. … The internet, mRNA vaccines, human gene therapy, GPS, the transistor — all emerged from the sustained public investment being dismantled today.”
The Diabetes Care editorial that Kahn and his colleagues attempted to distribute at the New Orleans conference is a cri de coeur targeted at the right-wing anti-science campaign. It’s titled, “Misguided Brushes of a Pen Continue to Dismantle and Destroy Biomedical Research in the United States.”
The result of the funding reductions, the authors wrote, will be “researchers being forced out of science and fewer people considering biomedical investigation as a career. Are we ready to watch the crippling of scientific advances in diabetes and all other diseases? It is no longer enough to stand idly by or work behind the scenes with lawmakers. Moreover, it is no longer appropriate to fret about political backlash.”
The scientists intended their distribution of the article implicitly as a counterweight to a keynote talk by NIH Director Jay Bhattacharya, who was going to speak without taking questions but who bailed out at the last minute. I sought a comment from Bhattacharya, who portrays himself as a champion of open scientific debate, about the eviction of the five scientists from the conference, but got no reply.
The uproar has roiled the ADA. Its president-elect, endocrinologist Jennifer Green of Duke University, and its scientific sessions planning committee chair, diabetes expert Mark Atkinson of the University of Florida, have both resigned their positions, though their role in the evictions, if any, is unknown.
The so-called New Orleans Five demanded an apology from the association, Kahn told me. They got one Wednesday from ADA Chief Executive Charles Henderson, via a video in which he extended his apology to “the broader diabetes community,” many members of which of whom he acknowledged were “disturbed, disappointed and concerned about what occurred.”
The truth is that the ADA’s action only validated the editorial’s exhortation to scientists to speak out forcefully: “We can no longer afford complacency and fear. We must all act now!” Will other scientific bodies draw a lesson from what happened in New Orleans? Let’s hope so.
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