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"Danny Moses, a hedge funder at the center of "The Big Short" said investing in cannabis is the "big long."

Moses has invested in a private equity firm, Merida Capital, that focuses on the emerging cannabis sector.

His best advice: "Be patient."

A hedge funder behind "The Big Short" trade is turning his attention to marijuana

Danny Moses, the head trader at FrontPoint Partners under Steve Eisman during the housing crisis in 2008, said cannabis is the new "big long" at a conference on Thursday.

Moses and Eisman's bet against the housing market was chronicled by Michael Lewis in the best-selling book, "The Big Short: Inside the Doomsday Machine," which was later turned into an Academy Award-winning movie.

"The lack of banking and lack of access to capital is creating a huge opportunity," Moses said at the Cannabis World Congress and Business Expo in New York City. "It's a goldmine, but it's also a minefield."

Because marijuana is considered a federally illegal substance (though it's legal in a number of states), many of the biggest Wall Street banks won't lend money or underwrite deals to companies in the sector, fearing regulators. It's an opportunity that some cannabis-specific firms and middle-market investment banks, like Canaccord Genuity, are keen to take advantage of.

That Wall Street reticence is starting to change, however. Tiger Global, a firm with $22 billion under management, invested in Green Bits, a cannabis technology company in April.

"It's not like Goldman Sachs is going to pull their business from Tiger just because they invested in that company," Moses said.

Moses invested in and sits on the board of Merida Capital, a New York-based private equity fund dedicated to the emerging cannabis sector.

Merida's managing partner, Mitch Baruchowitz, a former corporate counsel and Wall Street veteran, was named to Business Insider's inaugural list of rising stars in the cannabis investment scene.

Speaking on the same panel as Moses, Baruchowitz said Merida's thesis boils down to investing in companies that are best able to operate within the murky regulatory framework of legal cannabis.

"Regulation is a cost," Baruchowitz said at the conference. "It's going to dislocate people if they don't have the right tools to operate, so we go with companies with strong executive teams."

Moses said Constellation Brands' $190 millionpurchase of a 9.9% stake in Canopy Growth, a Canadian marijuana cultivator, is a "wake-up call for the industry."

When Moses is looking to invest in the industry, he tries to start small.

"Get to know the companies, both public and private," Moses said. "And be patient."

After all, Moses said it's only the "third inning" for the emerging cannabis sector — and it's only going to get bigger."

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