The infamous Nimbin is just a bit inland of Byron Bay. This really small tiny place is notorious for its hashish and marihana consumption. Weed is of course prohibited in Australia, but it's accepted in this small village. It basically lives from weed. If you go there you will be surprised how small this place is and how important weed is.
Even if you don't do drugs at all, this place is still very interesting. Anyone who is able to walk through this street and is not asked whether he would like some grass, looks like a drug dealer himself (we talk from experience).
If you would like to stay here for 1-2 or even 3 days and want to observe the live of the village, you can stay overnight at the probably only parking lot behind the village (not to be overlooked - just drive along the only street).
The parking area is indicated on the map below.
UPDATE: We know that police tried to crack down the drug selling business in Nimbin. As far as we are aware it is still the weed capital of Australia. We would be happy to read your experiences.
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