BOSTON, Mass. - Massachusetts marijuana companies made their case in federal court on Thursday in a lawsuit against the U.S. Attorney General. 

This lawsuit, which Spectrum News 1 started following when it was first filed last year, was thrown out at the first stage which opened the door for an oral argument in the First Circuit Court of Appeals in Boston Thursday morning.

In states like Massachusetts where marijuana is legal, Canna Provisions CEO Meg Sanders in Western Mass said there’s a huge financial burden with selling cannabis because of the Controlled Substances Act.

It puts into effect a higher tax rate for marijuana businesses and does not allow them federal small business tax deductions.

Some of these companies are suing Attorney General Merrick Garland arguing the act is unconstitutional for licensed businesses.

Since the creation of the Controlled Substances Act in 1970, marijuana is a Schedule 1 Controlled Substance in the eyes of the federal government; in the same tier as drugs like heroin and ecstasy. 

Congress created tax code 280E in the 1980s to prohibit tax deductions for businesses that traffic controlled substances which is where the huge financial burden comes in.

Lawyers for Canna Provisions and other companies said the lawsuit hinges on the Commerce Clause; it grants the federal government limited power to regulate interstate commerce and Congress sets those tax rates.

They claim this is a landmark case because no case like it has been heard before.

The lawsuit is seeking a court ruling that "the Controlled Substances Act is unconstitutional as applied to marijuana in states where it is legal".

At Thursday's hearing, representation for the federal government noted the Department of Justice is currently engaged in determining whether or not there is a basis for rescheduling marijuana from Schedule 1 to Schedule 3.

If the Canna Provisions motion is upheld, it could potentially be heard by the Supreme Court.