Where is it?
“Hanah Lee” is said to be a reference to the town of Hanalei, Hawaii – which, according to those who claim the song is a marijuana metaphor, is renowned for its marijuana. Note that this interpretation – and the drug references generally – has been rejected by the song’s authors.
Alternatively, the cliffs on the side of the beach at Hanalei are said to look like a dragon.
You can read a refutation of the drug claims at http://www.snopes.com/music/songs/puff.asp