@Kayla26
When you confronted your guests and they admitted that they were smoking and breaking your house rules, I would have told them they had to leave.
Forget the money, forget the deposit, they will continue to smoke at their convenience wherever they fancy. You will be better off without them.
I would suggest that you contact Airbnb, tell them that you have caught your guests smoking in your home and they admitted to it, against your house rules and it has made you uncomfortable hosting them and you want them to leave. You are informing them (Airbnb) before you action this as you may be subject to repercussions. Then, go tell your guests you want them to leave and reiterate the same in Airbnb messages to them. Tell them when you want them to leave by and be present when they go.
Don't offer or mention a refund, it will be up to the guest to sort anything out directly with Airbnb. Do not accept to pay a refund when Airbnb message you and ask if you would like to refund your guests. Your refund policy is what will decide what, if any refund is provided.
The alternative is you do and say nothing. (Not my recommendation).