The team has until May 3 to make a decision.
Smith was arrested Sunday at Los Angeles International Airport on charges of a false bomb report.
According to Los Angeles World Airports PIO Sgt. Karla Ortiz, the incident happened as a man, later identified as Smith, was going through Terminal 1 screening and was randomly selected for secondary screening.
Smith then became belligerent and uncooperative with the process and with the TSA agent, making a comment indicating he was in possession of a bomb before proceeding toward the gate area, according to Ortiz.
Los Angeles Airport Police made contact with him at the gate, and he then became uncooperative again and was detained and taken into custody by airport police.
This incident is Smith's latest run-in with the law.
In November, he pleaded not guilty to three felony counts of illegal possession of an assault weapon, stemming from an incident at a party at his home in 2012. He was scheduled for a discovery hearing in early April.
Smith also missed five games this past season while spending time in an alcohol treatment center. He entered treatment voluntarily three days after he was arrested for drunken driving for the second time since early 2012.
Despite the five-game absence, the 24-year-old Smith finished with 12 sacks and 34 tackles over the course of the Niners' season, which ended in a NFC Championship Game loss to division rival Seattle.
Information from ESPN.com's Bill Williamson and The Associated Press was used in this report.