When one of our preeminent journalists writes a book about you then Hollywood produces a movie about said book, all based on a financial decision you made, best believe people listen when you talk economics. Danny Moses, a hedge funder involved in The Big Short trade, fits the description. And Moses is just now focused his attention towards the cannabis industry.
Moses believes marijuana is the new “big long,” he said at the Cannabis World Congress and Business Expo last week, according to Business Insider.
“The lack of banking and lack of access to capital is creating a huge opportunity,” Moses said. “It’s a gold mine, but it’s also a minefield.”
To recap, Moses was the head trader under Steve Eisman at FrontPoint Partner when the housing market crashed in 2008. Michael Lewis later wrote the bestseller The Big Short: Inside the Doomsday Machine about Moses and Eisman’s bet against that housing market. That book was the basis for the Oscar Best Picture winner.
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.
In fact, Moses has followed his own advice. He’s invested in and sits on the board of Merida Capital, which is a New York-based private-equity firm dedicated to cannabis. He also advised those interested in investing in the cannabis industry to start small. Because in Moses’ estimation, the cannabis industry is only in its “third” inning, so need to rush things.
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“Get to know the companies, both public and private and be patient,” suggested Moses.
