My second grade class loved singing this, with or without the CD, and no one mentioned allusions to marajuana at all.
This book is great! My mom bought it for my toddler, and he LOVES it. I grew up with my parents singing and playing this song, and now my son can read the book and listen to the song as well.
The illustrations are well-done, and there is a lot to admire on every page. Honalee is a beautiful place :)
The CD had the song, sung by Peter Yarrow and his daughter, and 3 bonus songs, including an acoustic version of "Puff". The other two songs are cute, and not annoying like many children's songs.
Overall, I would reccomend this book to other people who grew up hearing "Puff" or anyone who like fantasy books or dragons. The book can stand alone without the CD if you wanted to, but the CD is lovely.