Lyric discussion by TsingTao 

The drug effects description is very likely true. And I'll admit I don't know much about the group Donovan (in fact I FIRST heard this song in that very simpsons episode talked about previously). But I'll take a stab and add my two cents.

Notice the singer talks about a bunch of different colors, and in the end he says "all our race..." ? I think he is making overtures towards the unity of all mankind. Of all races.

"Wear my love like heaven" - The heavans look down on all mankind, regardless of race or color. So if you wear your love LIKE that, you will love and respect all humanity. And while "All our race" could refer to one particulatr ethnicity, to me it sounds like he's talking about all the HUMAN race. Everyon being free and proud of who they are.

Just my take, maybe I'm being too optomistic...

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