The song's lyrics tell the story of a May 1969 drug bust at Bard College in Dutchess County, New York, referred to in the lyrics by its location, Annandale. The singer vows he is "never going back" to the college until "California tumbles into the sea" [Wikipedia]
On Jan. 31, 1970, the Grateful Dead were at the center of a drug raid in New Orleans, an event immortalized in their classic "Truckin'": "Busted down on Bourbon Street / Set up like a bowling pin." The Dead weren't necessarily surprised the raid occurred, but 19 members of their touring party were arrested and eventually released on a bail of close to $40,000. Most of the charges were eventually dropped, but that didn't stop the Dead from recounting their brush with the law in a song that would wind up one of their best-known. (Rapp)
Then we mashed em up and chopped em up,
And put em in the corncob pipe.
Smokin that wildwood flower got to be a habit,
We didnt see no harm.
We thought it was kind of handy,
Take a trip and never leave the farm!
Spent my days with a woman unkind Smoked my stuff and drank all my wine
Made up my mind to make a new start
Going to California with an aching in my heart
Someone told me there's a girl out there
With love in her eyes and flowers in her hair