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Sorry, the rules about the government assistance cards are very strict. Only foods that are prepackaged for home consumption are eligible under the program. It is viewed the same as going to a fast food restaurant. So a speciality cake would fall under those rules because it is viewed as a luxury under the rules of the government. The same applies for deli hot meals; it's a luxury item and not eligible. The computer will reject your ebt purchase if it is under the food stamp program rules. Your cash allotment would have to be used.
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YES, YOU CAN! I purchase birthday cakes all the time with EBT. I even bought a $300 wedding cake with some! Maybe it depends on the state you live in.
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