What would you do if you found your 16 year-old daughter selling pot?

I believe that us as humanity have the right to free-will. In other words, if they do something negative, let them learn from their own mistakes. Teenagers have natural angst and always feel the need to rebel. Pumping up rules may just make it worse, and could get her into harder drugs. Teenagers typically get into hard drugs for the fact that it leaves their system quickly. The only logical thing to do is negotiate. Let her know how you're feeling. If it dissapoints you, tell her. But that doesn't mean you shouldn't trust her. If a teenager sees that you're upset, typically it hits them harder rather than you lashing out anger. Hostility only causes a larger war, and she'd probably keep doing what she is doing anyway.
Guide her into the right direction. Keep her safe. If you see that it's controlling her, that's when you intervene. But if she is mature enough to handle it on her own, let her be. Watch out for her. She's a teen, and you cannot walk her own footsteps for her. If she messes things up, let her learn on her own. You don't learn from people telling you. You learn from your own wrong-doing.