Even more than the massive dunes and the sandboarding, there's one thing that Huacachina is very, very famous for. I believe that its official name is Casa de Avinoam (lit: "House of Avinoam") — that's what the blackboard-scrawled sign out the front says, anyway. Most people refer to it simply as "The Israeli place". However, I think the most appropriate name for it would be Beit marijuana, because that's where it gets its fame from: at the end of every meal, the waiters at this bizarre restaurant will give you a small complimentary plate of not-particularly-legal herbs, and some paper to roll it up in. The cuisine is great here — but let's just say that most people don't come here for the food.
I haven't actually ordered a meal there, but we popped into "The Israeli place" after dinner tonight, looking for a drink or two. Didn't end up ordering anything, as it's a bit expensive, and as we were feeling a bit out-of-place, being the only non-Israelis there. As they say, you don't have to be Jewish to come here, but you know, "it wouldn't hoyt". The place was filled with little groups of hairy, loud Israelis, drinking coffee and smoking Nargilla, over a game of cards, dominoes or sheshbesh.
Just a pity that I don't smoke (anything): because if I was going to start, this would be one hell of a place to do it. Anyway, it's an experience just walking in to a place like that. If free weed is what you're looking for, then you'll have no trouble whatsoever finding it in Huacachina.