Cambria Cannabis ETF Closes Up Shop as Investor Interest Fades

A cannabis ETF has come down from its high. 

Cambria Investment Management recently announced its Cambria Cannabis ETF (TOKE) is closing up shop. Shareholders have until April 17 to sell their holdings before the fund is liquidated on or around April 24, at which point any investors still holding shares will receive cash equal to their shares’ value. The move is based on the California ETF provider’s ongoing review of its product lineup “to ensure it meets the evolving needs of its clients,” per a company statement. The ETF launched in 2019, when investor hype around marijuana was strong following Canada’s legalization of recreational cannabis. It has struggled fairly consistently since then, however, as have cannabis funds at large, amid fading excitement for the industry and regulatory barriers. 

“Cannabis ETFs are tough; it’s feast or famine,” Matthew Tuttle, CEO of Tuttle Capital Management, told ETF Upside. “When the area is hot, the stocks ramp and AUM swells. But when it’s not, those stocks still have a tough time in this regulatory environment, and retail investors are fickle on the area.” 

Up in Smoke 

Late last year, President Donald Trump signed an executive order calling for marijuana’s reclassification from a Schedule I drug to a Schedule III drug to be expedited, which could allow for medical research for cannabinoids and reduce taxes for the industry. But as of now, marijuana is still a Schedule I drug. Not only is the regulatory environment uncertain, but these companies are also “shaky financially,” Tuttle said.

“[They] could be home runs if the regulatory chips fall in their favor, but if not, they are zeros,” he added. “From an institutional standpoint, that’s not a great trade-off. For the retail crowd, they are going to move their money to where it’s treated the best.” 

TOKE isn’t the only cannabis ETF to lose its buzz of late: 

• The AdvisorShares Pure US Cannabis ETF (MSOS), which VettaFi data show is the largest cannabis ETF on the market, is down roughly 30% year-to-date, while the Amplify Alternative Harvest ETF (MJ) is down 26%. Similarly, the Amplify Seymour Cannabis ETF (CNBS) dropped 28%.
• Last year, Amplify ETFs shut down the Amplify US Alternative Harvest ETF (MJUS).  

Still Lit? Industry enthusiasts aren’t giving up on cannabis’ potential just yet. Aaron Edelheit, CEO of Mindset Capital, took to X to share that sentiment, despite seeing the TOKE closure. After signing on to try to “resurrect” the ETF around two years ago, his firm “continues forward with multiple private funds in the cannabis space” and remains bullish on the opportunities.