I was in this exact same situation, being on the 2nd floor of a 3-story balcony. My neighbor would always bitch about the smoke. he would mock cough when I would cough. Finally one day I was smoking on my balcony and he started repeating what I was saying to my wife in a stupid voice. He was annoying and mocked me repeatedly. Then I screamed, "Shut the fuck up neighbor! Mind your own business." He tried to knock on my door a few times and I just said "no way neighbor get the hell away from my door."

As long as you don't live in Malaysia where they kill you for smoking, you should be alright.