A phrased used to call attention to the absurd length, breadth, and extremity of the cough of a person who has been coughing.
More often associated with Marijuana culture in Saskatchewan, Canada. Though the phrase does appear in some films and literature.
Can be used in a self-deprecating fashion, like:
"Goddam that Cannabis is fine, I lose a lung every time I toke this fine herb."
Or, it can be used to denigrate someone, like:
"Jesus, if you are going to lose a lung every time you smoke, go do it with someone else."