This is a combination of new fresh cedar and a dark color. The dark color is absorbing heat from the sun and this helps to draw out the sap from the wood. It could take years to truly dry-out and stop most of the sap.
You will have to fix the blisters when ever they happen. Instead of using Cover Stain use a shellac primer on the knots. Make sure to apply 2 coats of the shellac primer with some dry time between each coat, usually an hour or less depending on the temperatures and humidity.
The shellac primer should stick better than an oil based primer but this depends on the amount of sap remaining in the wood.