Steven walked into the living room and stopped when he saw his nephew, Danny. It wasn't his presence that paused Steven (Danny always barged in without Steven's knowledge), but it was the smell coming off of the boy's jacket.

“When did you start smoking weed?” said Steven.

Danny hesitated, then said, “I don't know what you're talkin about.”

“Don't lie to me.”

“I'm not.”

“Have you smelled yourself?” said Steven. Danny didn't say anything, then Steven's mouth dropped. “You were smoking it in my house.”

"It wasn't his presence that paused Steven (Danny always barged in without Steven's knowledge), but it was the smell coming off of the boy's jacket"

I'd just drop the 'but' in there. And I don't know the common opinion on commentary within parentheses. It might be more accepted to have it within dashes instead? Or simply to say 'for Danny always barged in"...

Also, the "then" in the next to last line should be an "and" or something. For some reaon, emphasizing the post hoc seems to negate the promptor hoc natura of the connection.

I'll read, but it might take me a week.

Great beginning, by the way. I'll want to know Danny's age and Steven's opinion, but still, I'm hooked.