The incident was recorded around 5:30 p.m. near the Gallivan Center in Salt Lake City.
In the video, restaurant owner Alex Jamison could be seen holding a fire extinguisher while he argued with two men -- one of whom was smoking -- about whether they were within 25 feet of his business.
WARNING: VIDEO CONTAINS PROFANITY
"Are you really going to spray him with a fire extinguisher?" the woman recording the video asked.
"I'm going to put that cigarette out," Jamison responded. "You can't smoke right here."
The man with whom Jamison primarily had been arguing appeared to put a lit cigarette in his mouth and said: "Do it."
Jamison then appeared to spray the fire extinguisher in the man's face. Someone could be heard saying, "Call the cops."
"Well I'll say that I'm not proud of my behavior, I let myself get egged on and I overreacted," Jamison said in a statement released to KSL-TV. "I'm a protective small business owner who has asked hundreds of people not to smoke near our patio in the interest of our customers and our neighbors' customers."
Jamison said he had asked the smoker "multiple times" that day to "go to the designated smoking area but should not have reacted to feeling disrespected."
The smoker, identified by the station as Jon Bird, said he's been experiencing shortness of breath and headaches from the chemicals he inhaled.
"Who in their right mind puts a fire extinguisher a foot and a half away from someone's face and just lets go?" he asked.
The Salt Lake City Police Department said it was investigating the incident.