Preheat your smoker to 250°F. For best results, initially preheat it to 300°F and then adjust to 250°F once you're ready to place the dish inside, as the temperature tends to drop when you open the lid.
Brown and fully cook the chorizo, then set it aside.
Cut the Velveeta and Mozzarella Cheese into 1-inch cubes.
Combine all ingredients in a 13x9 cast iron baking dish or a disposable aluminum pan.
Place the dish on the smoker and cook for 1.5 hours, making sure to stir every 30 minutes.
Serve the hot, melted cheese dip with tortilla chips and enjoy!