TOM HAGEN: No Sicilian can ever refuse a request on his daughter's wedding day.
Don Corleone grants the requests people make to him—but they're not totally "free." He wants loyalty and future favors in return.
DON CORLEONE: You can act like a man! [Slaps Johnny Fontane] DON CORLEONE: What's the matter with you? Is this what you've become, a Hollywood finocchio who cries like a woman? "Oh, what do I do? What do I do?" What is that nonsense? Ridiculous!
"Finocchio" (not to be mistaken for "Pinocchio") is a negative and offensive Italian term for a gay person. Don Corleone is accusing Johnny of having gone soft—it's not the traditional Sicilian way of handling your problems.
TOM HAGEN: […] Right now we have the unions and we have the gambling and those are the best things to have. But narcotics is a thing of the future. If we don't get a piece of that action we risk everything we have. Not now, but ten years from now.
Tom sees that the criminal wave of the future is drugs. But it runs against the Don's sense of code and tradition and would risk his political connections. It's too modern, not traditional enough.
DON CORLEONE: I said that I would see you because I had heard that you were a serious man, to be treated with respect. But I must say no to you and let me give you my reasons. It's true I have a lot of friends in politics, but they wouldn't be so friendly if they knew my business was drugs instead of gambling, which they consider a harmless vice. But drugs, that's a dirty business.
Don Corleone doesn't like drugs because they're overtly harmful. (Of course, people get addicted to gambling too, but he sees that as being less negative.) Even though he's a criminal, he surprisingly has things that he is and isn't willing to do. Drugs don't jibe with his sense of tradition or mission. He views himself as being fundamentally just, if technically subverting the law.