I used to smoke a shitload of weed in high school, college, and grad school. I am now a well adjusted adult, which is the place from where my advice comes.
First and foremost, DON'T TELL THE SCHOOL. DON'T CALL THE COPS. If your kid ends up in jail, they will meet people who will teach them things that make selling some weed look like a tea party. And, if they are kicked out of school, they will likely resort to more selling, quite likely of drugs harder/with higher legal consequences than weed.
Next, keep an open mind. Not as in "keep an open mind about weed man", because thats not what I am saying. Keep an open mind re: the fact that your child may just not realize the illegality of what they are doing. Not that they arent smart, but a large number of kids are going to smoke weed, or know someone who does. It is easier to get than booze was when we were young. So combine that with the fact that we as a society tend to treat smoking cigarettes, smoking weed, and underage drinking all as the same level of "bad" and you get a lot of kids who just dont get what they are doing in the grand scheme of things.
Now, before doing anything else, talk to your kid to get an idea of the situation. First off, find out what level of "dealing" they are doing. Are they buying QPs (quarter pounds) of weed and breaking them down into a lot of smaller bags for all of the weed heads at their school? Are they buying an ounce or less and selling dime bags or single joints to their friends here and there?
Once you know whether your kid is the next Tony Montana or not, find out why your son is doing this. Is it for the easy money, is it because it has made him a lot of friends, is it just because he has a good weed connection and is taking advantage of it to hook his friends up? Or is it, as was the case when I smoked a lot of weed and sold some to my friends from time to time, because you can basically buy an ounce, break it down, sell most of it to your friends to recoup the costs, and end up with your own weed to smoke for free?
I realize that to many puritanical parents on this board it seems like this is overboard, but you really need to know how deep your kid is before you make any decisions.
I would also find out how often your kid is smoking weed. Big difference between the effects/severity of someone who smokes on the weekends at parties vs someone who smokes every day. And yes, your kid could very easily be selling and still fall into the latter category.
Now that you have this knowledge and know where your kid is coming from, talk to a professional outside of your school who specializes in these issues and go from there.
However please, from personal experience, don't send your kid to rehab for weed. They are going to--much as is the case in jail--learn a LOT more about drugs, hiding drugs, doing other drugs, buying drugs, etc. than they likely do now.