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?
Business
F.D.A. Commissioner Marty Makary Resigns After Weeks of Pressure
Dr. Marty Makary, the commissioner of the Food and Drug Administration, resigned on Tuesday, a move Preside Trump acknowledged on Tuesday, after weeks of pressure and rumors that the president was planning to fire him.
Dr. Makary ultimately resigned over concerns about the administration’s decision to authorize fruit-flavored e-cigarettes, an action he opposed, according to four people familiar with the matter. Dr. Makary told those close to him that he could not in good conscience approve flavored vapes, given their appeal to young people, and would not do something he did not believe in.
His departure caps a tumultuous run at the helm of an agency that regulates medical treatments, vaccines and much of the U.S. food supply. Dr. Makary came to the F.D.A. as a reformer, instituting so many new initiatives that he became known — and sometimes mocked — for his white board on wheels, festooned with Post-it notes lining up announcements that he promoted on frequent television appearances.
But his efforts at times put him at odds with the powerful food, tobacco and pharmaceutical industries. In the process, he made a number of enemies in Washington and on Wall Street, including some biotech leaders, abortion foes, tobacco executives and eventually some members of the administration.
He also drew criticism from public health leaders who viewed him as pandering to anti-vaccine activists with the release of an unsupported memo claiming that there were deaths related to Covid vaccines. Criticism flared again when he allowed the renewed use of unproven peptides, or injectable compounds with uncertain effects, a policy favored by Health Secretary Robert F. Kennedy Jr.
“He has offended almost everyone involved in F.D.A. issues, which is not easy to do,” said Diana Zuckerman, the president of the National Center for Health Research, which weighs in frequently on F.D.A. decisions. “But it would still be a disaster if he is replaced by someone who appeals primarily to tobacco companies, anti-abortion activists” and pharmaceutical lobbyists, she added.
The resignation was first reported by Politico.
Kyle Diamantas, the F.D.A.’s top food regulator, was named the acting commissioner. Mr. Diamantas came to the agency from Jones Day, a law firm where he represented Abbott Nutrition, a leader in the infant formula industry. He has become a vocal champion for policies to remove chemicals from the food supply and increase transparency around food ingredients.
The most consequential clash of his tenure was over the authorization of flavored e-cigarettes, a step Dr. Makary resisted over concerns that fruity and candy flavors would lure young people to addictive vapes. The White House ultimately prevailed. Earlier this month, two fruit-flavored vapes were approved. And last Friday, the F.D.A. quietly issued a policy allowing them to be more widely marketed.
Mr. Trump told reporters Tuesday afternoon that he wished Dr. Makary well.
“Marty’s a terrific guy, but he’s going to go on and he’s going to lead a good life,” Mr. Trump said as he left for a trip to China. “He’s a great doctor, and he was having some difficulty.”
Dr. Makary also faced repeated calls for his firing from abortion foes who accused him of dragging out the timetable for a study of the safety of mifepristone, an abortion drug, viewing the exercise as one that could support their efforts to restrict the drug’s distribution.
Dr. Makary, who was a Johns Hopkins University cancer surgeon and health policy researcher before entering government, attempted to play to Mr. Kennedy’s Make America Healthy Again movement, going as far as sitting in a frigid plunge pool with the wellness influencer and biohacker Gary Brecka. He also led popular efforts to authorize natural food dyes and change how people talked about hormone replacement therapy for women.
With the support of MAHA voters, Mr. Trump framed Dr. Makary as a bold reformer, someone who would right an agency that had “lost sight of its primary role as a regulator.”
Early on, Dr. Makary and Dr. Vinay Prasad — his handpicked director of gene therapies, stem cell treatments and vaccines — drew scrutiny when they restricted the criteria for prescribing Covid vaccines to people older than 65 or with a list of health concerns.
Dr. Prasad resigned under pressure last summer after he was targeted by the right-wing influencer Laura Loomer, in part over his crackdown on a drug company tied to several patient deaths. Dr. Prasad was later brought back, but left the agency again in recent weeks.
Dr. Prasad and his counterpart in the agency’s drug division rejected a number of new drugs for rare diseases, citing flaws in a company’s research supporting an approval. As Dr. Makary went on television to defend the rejections, frustrated biotech leaders and investors vented to the White House and Mr. Kennedy’s office.
“On vaccines and mifepristone, Makary rarely prioritized rigorous evidence,” said Lawrence O. Gostin, a professor at Georgetown Law who studies the F.D.A. “Ironically, his one stand for high-quality science — on flavored vapes — created the friction with the White House that contributed to him losing his job.”
Dr. Makary also faced a series of challenges inside his agency. He started his work last year contending with a haphazard array of staff cuts led by Mr. Kennedy and Elon Musk’s Department of Government Efficiency. Some staff members vital to reviewing complex surgical devices, inspecting food manufacturers and monitoring drug safety were laid off.
Though some people were hired back, another wave of voluntary departures left the agency without more than 4,000 staff members, or about a fifth of its work force.
Dr. Makary ultimately became a champion for the agency’s staff, fighting to get authorization to hire about 3,000 employees. The process of recruiting and hiring has moved slowly, though, leaving staff members at the agency and those who watch it concerned about its future.
Nathan Cortez, a Southern Methodist University law professor who studies the F.D.A., said that finding a permanent replacement could be a major challenge.
“The new commissioner will have to walk a tight rope between what the administration wants — Trump and R.F.K. Jr. — and what federal law commands of F.D.A.,” he said in an email, adding: “Historically, the expectation is someone with an M.D. or PhD and real scientific chops. It’s a lot of pressure.”
Karoun Demirjian contributed reporting.
Business
California consumers accuse popular Italian food brand of tomato fraud
A popular U.S. food distributor has long promised premium, Italian tomatoes in its products. Two Californians claim the company is committing tomato fraud.
A lawsuit filed this month alleges that Cento Fine Foods, a U.S.-based Italian food distributor, falsely labels its products as containing San Marzano tomatoes.
The tomatoes in question are a premium variety that can be grown only in Italy’s Campania region and are recognized by the food industry as the “Ferrari or Prada” of tomatoes, the lawsuit claims.
Cento, which has won in a similar case in New York, says its tomatoes are from the right region though they do not have the same Italian government certification.
The complaint alleged that the company is falsely branding its tomato products because they lack the proper certification required to use the name.
“They lack the taste, consistency, and other physical characteristics associated by consumers with certified San Marzano Tomatoes,” the lawsuit states.
The plaintiffs in the California suit claim they were misled by deceptive labeling when purchasing the product more than a dozen times in California stores. The lawsuit seeks class-action certification and asks the judge to award more than $25 million to customers.
Cento refuted the claims made in the complaint and will seek dismissal of the lawsuit in court, a company spokesperson told The Times on Monday.
The ongoing battle to define who may use the San Marzano name underscores the importance of food branding at every level.
The case goes beyond regional requirements, such as calling something Champagne because it is made in that part of France. It is more akin to Washington Apples. The Washington Apple label is backed by a system of requirements and checks. Apple growers, even if they are in the Western state, can only label their fruit as a Washington Apple if they have gone through that process. Otherwise, have to use Apples from Washington.
San Marzano tomatoes have protected status in the European Union, meaning that an independent consortium must regulate and certify that the product is grown in the right region and with the proper techniques before it is sold.
Cento says it has the right to use the name as its tomatoes are grown in the same region. Its website offers a detailed description of its harvesting and packaging process, which it says are in line with the consortium’s guidelines. Cento’s tomatoes, however, are certified by an independent third-party agency not affiliated with the consortium.
The lawsuit is meritless, said the company spokesperson, who added that the harvesting process is subject to strict quality controls and is regularly audited.
“We take nothing more seriously than the quality and integrity of our products,” A company spokesperson said. “We take pride in the fact that our labels accurately describe the products inside. Cento is a brand consumers can trust.”
Cento had the consortium’s certification until the 2010s.
A similar case against the company filed in New York was dismissed by a federal judge in 2020. The judge ruled in favor of Cento, ruling that a reasonable customer wasn’t likely to seek tomatoes certified by the consortium over a product that matched the same standards but was certified by a different agency.
The company defended its harvesting methods at the time, claiming the tomatoes are grown in the right region and with the right techniques.
The company’s tomatoes are grown in the Sarnese-Nocerino area of Italy, located near Mt. Vesuvius, according to its website. The tomatoes have an elongated plum shape and a pointed tip.
The third-party certifying body administers random testing throughout the growing process and tests each product that arrives at the company’s New Jersey warehouse before it is released to stores, according to the website.
The website also has a traceability feature, which enables customers to use a can’s lot number to find the field in Italy where the tomatoes were grown.
Business
China Increasingly Views Trump’s America as an Empire in Decline
When President Trump visited China in late 2017, Xi Jinping welcomed him with a grand display of Chinese history and culture: a four-hour private tour of the Forbidden City culminating in a performance by the Peking Opera.
Eight years, a pandemic and two trade wars later, Mr. Trump is returning to Beijing, where the theme of future dominance, not ancient majesty, has filled domestic and international headlines with articles about dancing robots, drone swarms and the quiet hum of electric vehicles.
China increasingly casts itself not as a fading civilization trying to catch up to the West but as a superpower poised to surpass it. Chinese nationalists and state-linked commentators say they have Mr. Trump to thank. America under his rule, they say, validates Mr. Xi’s worldview centered on “the rise of the East and decline of the West.”
For decades, many Chinese viewed the United States with a mix of admiration, envy and resentment. America represented wealth, technological sophistication and institutional confidence. Even critics of Washington who reviled the American system often assumed that it worked.
Mr. Trump’s ascent and his volatile second term shattered that image.
In January, a nationalistic Beijing think tank affiliated with Renmin University published a triumphant report about Mr. Trump’s first year back in office. The report argued that his tariffs, attacks on allies, anti-immigration policies and assaults on the American political establishment had inadvertently strengthened China while weakening the United States. Its title: “Thank Trump.”
The report called Mr. Trump an “accelerator of American political decay,” with the United States sliding toward polarization, institutional dysfunction and even “Latin American-style instability.” His hostility toward China, the authors argued, was a “reverse booster” that unified the country and helped bring about its strategic self-reliance.
“At this turning point in history,” the authors wrote, “what we hear is the heavy and haunting toll of an empire’s evening bell.”
Such language, once confined largely to nationalist corners of the Chinese internet, has increasingly entered mainstream political discourse.
Evidence of this shift is measurable: The use of terms related to “American decline” in official Chinese sources nearly doubled in 2025, according to a study by two Brookings Institution researchers.
The narrative of American decline did not begin with Mr. Trump. For years, Chinese state media and nationalist pundits have highlighted mass shootings, homelessness, political polarization and economic inequality in the United States as evidence of the failures of Western democracy. More recently, official outlets embraced the viral phrase “kill line,” borrowed from video game culture, to describe what they portrayed as the irreversible downward spiral facing America’s working poor. It’s a familiar tactic of the Communist Party to distract the Chinese public from the country’s own issues.
But Mr. Trump’s return to office and his administration’s erratic decision-making in both domestic and foreign policy have supplied the propaganda machine with plentiful fresh material. Images of immigration raids, the Minneapolis shootings and bitter political infighting circulate widely on Chinese social media alongside triumphant commentary about American dysfunction. What once sounded to many educated Chinese like exaggerated propaganda increasingly feels, to some, observational.
A 31-year-old education consultant in northern China who advises families on overseas study told me that parents who had once aspired to Ivy League degrees for their children now saw America as “too chaotic.” A decade ago, more than 80 percent of his students considered the United States for study abroad, said the consultant, who asked me to use only his family name, Wang, for fear of government retribution. Now, he estimated, the figure has fallen to 45 percent.
Mr. Wang described watching footage of the Jan. 6, 2021, attack on the U.S. Capitol and finding himself thinking of the Red Guards that Mao Zedong dispatched to tear apart China’s institutions during the Cultural Revolution. That feeling returned more insistently with the immigration raids and the targeting of perceived enemies during Mr. Trump’s second term.
“The America that represented wealth, freedom and institutional confidence feels like it belonged to a different era,” Mr. Wang said.
Among China’s foreign policy analysts, the conversation has turned to what Beijing can gain from the bilateral relationship, which has become more transactional under Mr. Trump than under President Joseph R. Biden Jr.
“Only China can save Trump,” said Huang Jing, a professor at Shanghai International Studies University, during a media event that was livestreamed in late 2025. With the U.S. midterm elections approaching, he argued, Mr. Trump needed visible wins such as Chinese purchases of American soybeans, corn and natural gas that could play well in swing states.
“Since Trump,” Mr. Huang said at the event, “the United States has become increasingly prone to compromise.”
Wu Xinbo, a leading American studies scholar at Fudan University, offered a similar assessment. If Republicans lose control of the House this fall, he said at the same event, Mr. Trump is likely to pivot toward his foreign policy legacy, creating space for a larger accommodation with Beijing.
China, he said, “should make good use of this opportunity.”
The war in Iran has reinforced the view that China has the upper hand with Mr. Trump. At a conference in late April, Mr. Wu argued that the war reduced Washington’s leverage against China while increasing Beijing’s by consuming American military and diplomatic attention in the Middle East.
The logic helps explain why China’s official language regarding Mr. Trump has often been less hostile than it was regarding Mr. Biden. According to a project by the Tracking People’s Daily newsletter, which used artificial intelligence to analyze nearly 7,000 Chinese official statements since 2021, Mr. Biden was presented as a more systemic threat — so serious that Mr. Xi accused Washington of “encirclement and suppression,” unusually confrontational language for a Chinese leader.
By contrast, the study noted, “Trump’s transactionalism is something Beijing understands and can work with.”
Yet belief in U.S. decline has not translated into aggressive Chinese foreign policy, at least not the kind of overt geopolitical gamble that Russia made before invading Ukraine.
China has become more assertive, pressuring U.S. allies, expanding military activity around Taiwan and restricting rare-earth exports in response to Mr. Trump’s tariffs. But even as Beijing advances the idea of the decline of American power, it appears wary of directly confronting what many Chinese analysts describe as a still dangerous superpower.
Two factors play into this circumspection. First, many Chinese strategists believe Beijing can do better by sitting back while the Trump administration fumbles. Second, an unstable and distracted United States may also be a more unpredictable one.
Beijing’s export-dependent economy needs a stable international order to function. An erratic United States threatens that stability in ways a confident, predictable America never did, Zongyuan Zoe Liu, an economist at the Council for Foreign Relations, told me.
Mr. Xi “is getting the United States he always wanted,” she said, “and the America he most feared at the same time.”
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