Support for legalizing marijuana has reached an all-time high in America, where total demand is estimated at roughly $50 billion annually. In a Gallup poll conducted a week before Canada became the second country in the world to permit recreational cannabis sales, two-thirds of Americans were in favor of similar legislation at home that could send legal cannabis sales soaring.

Unfortunately for Canopy Growth Corporation (NYSE:CGC), Cronos Group Inc. (NASDAQ:CRON), and Tilray Inc. (NASDAQ:TLRY), investors have started paying attention to numbers these companies are reporting in the areas where they can sell marijuana now, which don't include the giant U.S. market. Here's why you might want to avoid these Canadian companies until dreams of major international revenues begin to materialize.

Roll of hundred dollar bills sitting on a mouse trap

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Canopy Growth Corporation: A big platform

With an established 5.6-million-square-foot platform, Canopy Growth Corporation will probably be able to grow a lot more marijuana than it can sell. As of Aug. 14, 2018, the company boasted supply agreements totaling 67,500 kilograms (148,812 pounds) annually. Canopy Growth Reported an average sale price of 8.94 Canadian dollars ($6.83) per gram during the three months ended June. Maintaining this impressive pricing point would translate to roughly CA$600 million annually in top-line revenue. 

Canopy Growth's operating expenses hit an annualized run rate of CA$290 million during the three months ended June, and a recent $4 billion investment from Constellation Brands (NYSE:STZ) has encouraged the company to take on more employees. That means there probably won't be a great deal left over for the bottom line, and that's assuming an oncoming supply glut doesn't lower cannabis prices in the quarters ahead.

Canopy Growth's recent $8.1 billion market cap still has a long way to fall if investors stop believing this company's growth prospects are many times greater than present supply agreements suggest.

Cannabis flower and oil, with a Canadian flag in the background.

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Cronos Group Inc.: International aspirations 

Although Cronos Group is building production facilities in Israel and Australia, the vast majority of the company's marijuana will be produced and sold in Canada in the years ahead. Earlier this year, Cura Cannabis agreed to purchase at least 20,000 kilograms annually from Cronos Group over the next five years. 

Cronos Group has a distribution agreement with a chain of 5,000 pharmacies in Poland, but the partners aren't approved to sell cannabis in the country yet. That means Cronos will be largely dependent on sales to a Canadian market expected to climb to around $5 billion annually in a few years.

Cronos doesn't have the capacity, yet, for deals on the scale of Canopy Growth's, but master supply agreements in Ontario and British Columbia could make the company's products available for around half of Canada's adults. 

We still don't know how much of Cronos Group's products its distribution partners will be able to move. If the company doesn't earn a large share of its available market, its $1.5 billion market cap could fall even further. 

Marijuana plants in an indoor farm.

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Tilray Inc.: Wait for it

Tilray's High Park subsidiary has adult-use supply agreements with Quebec, Ontario, British Columbia, and three smaller provinces. The company also earned bragging rights as the first company to gain approval to sell cannabis oil and flower in Germany.

It's important to remember that Tilray and its U.S.-listed peers can't operate in the U.S., where cannabis is still illegal under federal law. That's going to make it hard to justify a market cap of around $11 billion, because the U.S. is where the majority of the world's legal, or semi-legal, marijuana sales will occur in the years ahead.

This problem won't be lost on early investors who haven't been able to sell any shares that have rocketed up since the company's initial public offering this summer. Just 23% of Tilray's outstanding shares are currently available for trading, but once a 180-day lock-up period expires in January, shareholders could lose a bundle. 

Too early to pick big winners

Regulations that severely limit Canadian consumer options right now are going to make it hard for these companies to meet sales expectations. The country's most populous province, Ontario, doesn't even have any adult-use stores open yet, and the types of processed products that are driving sales growth in U.S. markets aren't available there legally.

Future expansion to foreign markets could return these Canadian marijuana stocks to their former peaks. Less-than-stellar early sales data in Canada that sends them spiraling further downward seems a lot more likely, though. Until we see some numbers that say otherwise, it's best to avoid these cannabis stocks.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.