Tilray (NASDAQ:TLRY) announced on April 6 that its quarterly earnings ending Feb. 28 finally turned net income profitable. That’s the good news for the No. 1 market share cannabis company in Canada. But it also has bad news, hidden in the details that could keep hurting TLRY stock.

So Tilray merged with Aphria last year and it claims that it has now “achieved $76 million in cost synergies to date.” This has led to a 23% increase in revenue for the quarter. The big news was that the company now made $52.5 million in net income for the quarter. In fact, it made a 34.6% net income margin for the quarter. That is pretty good, right?

The answer is, maybe. The problem is Tilray is still burning through cash. That was not in the operating headlines the company put forward. In fact, it’s buried in the Cash Flow Statement which is only seen on page 4 of the 10-Q filing with the Securities and Exchange Commission. That shows that for the nine months ending Feb. 28, there was a negative $156.7 million in operating cash flow. After deducting another $28.47 million in capex spending, the total cash outflow was over $185 million.

If we compare this with the six months Cash Flow statement, it shows that the cash burn was $134.20 million (i.e., $110.3 million in operating cash flow plus $23.9 million. So for Q3 the actual cash burn was negative $50.96 million.

So how does a company report a positive net income of $52.5 million yet burned through almost $51 million? The answer is — always follow the cash. Who cares what the GAAP or non-GAAP net income numbers are if cash is flowing out the door?

That is why TLRY stock is still falling and will likely keep declining. Year-to-date it’s down 15.63%. Unless the company can figure out how to get cash flow positive and do it in a big way, don’t expect TLRY stock to rise substantially from here.

After all, isn’t cannabis supposed to be a cash cow business? Certainly, it is in the illegal market. Why isn’t it in the legal market? I don’t understand why this is so hard. Unless there is a clear path to huge cash flow, value investors are likely to stay away.

On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.