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Can I edit an Illustrator file that I have saved in Creative Cloud Files without first having to download it to my mac and then re-upload it once I'm finished editing it?
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You cannot access file directly that are stored in the Creative Cloud file storage.
You can use file syncing and store the file in your Creative Cloud Files folder. That way your changes are synced up to the Creative Cloud file storage. If you do not have access to the file sycning yet you can sign up from the Early Access page at https://creative.adobe.com/earlyaccess.