Rock, I'm sure it will work just fine. I like paprika, just red, no heat, I grow pimento peppers, then dehydrate and grind. It's nice to have some of my herbs and spices on the shelf, that I gathered myself.
I don't think it would be too difficult to smoke the peppers first, then dehydrate, then grind. Or maybe when they make smoked paprika, they just smoke the ground/dried paprika after it's already made? I don't know.