"Toke" definitely refers to pot, not coke.

Lawrence Welk embodied "squaresville," but he had a nationwide audience for a weekly TV show and therefore could afford to hire the very best players for his band. It is extremely likely that at least a few band members knew very well what the song was about, and undoubtedly had a chuckle or two at their naive employer's expense.

New Orleanian clarinet prodigy Pete Fountain got a huge break when Welk hired him and immediately began featuring him as a soloist. Pete went straight from sustenance-level local club gigs to nationwide fame, including appearances with Ed Sullivan and Johnny Carson. Pete has never been a counterculture icon but he's a jazz player, for crying out loud, and is still a very hip and notably fun-loving character. Did he ever inhale? Who's to say?