Whatever 'cokey' means/meant could be several things, as with most words, particularly colloquialisms. Jimmy Kennedy was Canadian and whilst he based the song loosely on similar French and English children's games (e.g.,Looby Loo) it might be worth looking to Canada for the answer. I can't believe he deliberately included a reference to drug taking in a 40s pop song.

I don't know how old the usage 'okey cokey' is as an extension of 'okay' for instance, might be a remnant of the song.