A new Congressional Research Service report lays out how federal tax law still treats state legal marijuana businesses like criminal outfits, mainly through IRS code 280E. Because cannabis is still Schedule I, 280E blocks these companies from taking normal business deductions or credits—jacking up their effective tax rates far above mainstream businesses. Some operators have argued that this is more than just tough policy; they say it’s a financial “penalty” that violates the Eighth Amendment’s ban on excessive fines. CRS walks through a key case, Northern California Small Business Assistants v. Commissioner, where most tax court judges rejected that argument and upheld 280E—but several judges signaled discomfort, with some agreeing it *does* look like a fine, even if they didn’t rule it “excessive.” The report notes that if marijuana is moved from Schedule I to Schedule III, as the Biden era review and Trump’s rescheduling order envision, 280E would likely no longer apply, instantly changing the economics of the industry. For now, though, the courts have left 280E standing, and DOJ is dragging its feet on when rescheduling will actually be finalized.