Originally used by Mike Myers in "Austin Powers: Goldmember" as a joke about Dutch people. The whole movie (for whatever reason) is riddled with anti-Dutch jokes. This phrase was intended to highlight two of the popular stereotypes of Holland: marijuana and sweet confections. There really is no deeper meaning other than to play on these stereotypes. Since the release of the movie, the term has gained popularity as a general reference to marijuana use, and the "munchies" that may follow.
We've got the whole gang coming over for a smoke and a pancake.
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