Cambria's TOKE ETF Goes Up in Smoke, Cites Evolving Client Needs

MANHATTAN BEACH, CA – March 25, 2026 – Cambria Investment Management is extinguishing its thematic cannabis fund, announcing the scheduled liquidation of the Cambria Cannabis ETF (TOKE). The move, effective in late April, marks the end for a fund that once sought to capitalize on the burgeoning green rush but ultimately succumbed to market volatility and persistent regulatory headwinds.

In a press release, the California-based asset manager stated the decision was made by its Board of Trustees on March 24, 2026, following an “ongoing review process of its product lineup to ensure it meets the evolving needs of its clients.” The fund, which represented less than 1% of Cambria's more than $4.1 billion in total assets, will cease trading on Friday, April 17, 2026, with its final liquidation expected on or around April 24.

While the official language points to a routine portfolio adjustment, the closure of TOKE tells a broader story about the challenges plaguing the cannabis investment space. For investors, it serves as a stark reminder that even professionally managed, actively traded funds can struggle to find profits in one of the market's most unpredictable sectors.

A Harsh Reality for a Niche Theme

Launched in July 2019 amid a flurry of investor excitement for the cannabis industry, the Cambria Cannabis ETF never quite delivered the high returns many had hoped for. The fund's performance history is a sobering chronicle of the sector's volatility. Despite a brief positive turn in 2020 and a stronger performance in 2025 with a 21.52% return, the fund’s long-term track record has been deeply negative.

Data from March 2026 shows a staggering cumulative loss of approximately 79% since its inception. The fund posted significant annual losses, including -46.01% in 2022 and -37.55% in its first partial year of 2019. This sustained underperformance failed to attract significant capital. As of March 2026, TOKE's assets under management (AUM) hovered between $15.7 million and $19 million—a paltry sum compared to the $415 million average for funds in its miscellaneous sector category.

As an actively managed fund with a global mandate, TOKE's managers were tasked with picking winners from a diverse pool of 20 to 50 cannabis companies. Its holdings included swaps on U.S. multi-state operators like Green Thumb Industries and shares in Canadian players like Cronos Group. However, even an active strategy could not insulate the fund from the industry's deep-seated problems, ultimately leading Cambria to conclude it was no longer meeting client needs.

Navigating a Volatile Market

The struggles of TOKE are not an isolated incident but a symptom of the broader cannabis market's difficult adolescence. Despite projections of the global market reaching over $80 billion in 2026, the path has been anything but smooth. The U.S. market, a key driver of growth, even saw its first-ever annual revenue decline in 2025 due to pricing compression, oversupply, and a lack of federal reform.

The central conflict remains the chasm between state and federal law. While 42 states have legalized cannabis in some form, it remains a Schedule I controlled substance at the federal level, on par with heroin. This classification creates crippling operational hurdles. Most notably, Section 280E of the tax code prevents cannabis businesses from deducting ordinary business expenses, leading to exorbitant effective tax rates that can exceed 70% and severely hamper profitability.

Hope for reform has been a constant, yet often unfulfilled, catalyst for the sector. An executive order signed by President Trump in late 2025 to expedite the rescheduling of cannabis from Schedule I to the less-restrictive Schedule III has buoyed investor sentiment. Such a move would finally offer relief from the 280E tax burden. However, the much-anticipated SAFER Banking Act, which would grant cannabis companies access to traditional banking services, continues to stall in Congress. Without access to banks, the industry is forced to rely on expensive private credit, facing a nearly $3 billion “debt tsunami” set to mature by the end of 2026.

A Strategic Pruning

For Cambria Investment Management, shuttering the TOKE fund appears to be a calculated and disciplined business decision. Liquidating small, underperforming funds is a common practice for asset managers seeking to optimize their product lines and allocate resources more effectively. With TOKE representing a tiny fraction of its total AUM, the move allows the firm to shed a distracting and resource-intensive product.

This is not the first time Cambria has made such a move. In January 2025, the firm liquidated its Cambria Global Tail Risk ETF (FAIL) based on a similar ongoing review process. This pattern suggests a commitment to portfolio hygiene, ensuring its lineup of 19 other ETFs—spanning strategies from shareholder yield to global asset allocation—remains robust and aligned with its quantitative focus.

By closing TOKE, Cambria is effectively cutting its losses in a thematic area that has proven more challenging than anticipated, allowing it to focus on its core, more successful strategies. The firm has committed to bearing all liquidation fees and expenses, a shareholder-friendly gesture that cushions the blow for remaining investors.

What's Next for Investors?

Shareholders still holding TOKE have two primary options. They can sell their shares on the open market before the close of trading on Friday, April 17, 2026, which allows them to control the timing of their exit and realize any capital gains or losses. Alternatively, they can hold their shares until the liquidation date of April 24, at which point they will automatically receive a cash distribution equal to the net asset value of their shares. Either action is considered a taxable event, and investors should consult a tax professional regarding their specific circumstances.

For those looking to maintain exposure to the cannabis sector, several alternatives remain, each with its own strategy and risk profile. The AdvisorShares Pure US Cannabis ETF (MSOS), the largest fund in the space with over $800 million in assets, focuses exclusively on U.S. multi-state operators, which stand to benefit most from federal reform. Other options like the Amplify Alternative Harvest ETF (MJ) offer broader, global exposure, while actively managed funds like AdvisorShares Pure Cannabis ETF (YOLO) and Amplify Seymour Cannabis ETF (CNBS) provide different takes on navigating the complex market. The liquidation of TOKE underscores the need for thorough due diligence, as investors must weigh the potential for high rewards against the significant regulatory and financial risks that continue to define the cannabis industry.