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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 crash in 2008, said at a conference on Thursday that cannabis is the new "big long."

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.

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

But that Wall Street reluctance is starting to change. 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.

Mitch Baruchowitz, the managing partner at Merida and a Wall Street veteran who was formerly a corporate counsel, was named to Business Insider's inaugural list of rising stars in the cannabis-investment scene.Moses said Constellation Brands' $190 million purchase of a 9.9% stake in Canopy Growth, a Canadian marijuana cultivator, was 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.

We cover his part in the Big Short story, but also lots of other interesting ground, including the state of sell-side research and financial markets. I love conversations with traders because they live and breathe market risk. You’ll be able to see why quickly in this great conversation with Danny Moses.