They could easily come up with a way to tax it. I'm sure it would work out to be exactly the same as ciggarettes, in that there are production farms to grow it, then it gets sent to a factory to be processed. Hell, it may even come with filters, who knows.
At this point, it will be easy to come by, just like ciggs, so with a real supply that's easy to get, the price will drop. Severely. The manufacturing cost per pack will be pennies, so after a huge tax on it, just like ciggs, a pack of 20 will be $4 - $8. This will kill any incentive anyone might have to grow their own, because it's no longer cost effective and too much work when you can go to the gas station and just get it. This means that drug dealer's largest seller is now completely wiped out, putting many of them out of business.
Kinda like booze, right?