If the taxes are too high or the regulations too onerous, black markets will still spring up. Tobacco black markets are everywhere in NYC to avoid the super high state tax.

Also, only so much good can come from "sin taxes". Take lotto (another "sin tax" of sorts). On paper it seems really good for society because all that money can be used for schools and all sorts of social good. But it also has the negative consequence of putting additional financial strain on the people who already have the most financial strain and it's hard to tell if the added funding to schools cancels out the additional financial strain placed on the lower classes.