According to a 1995 interview on Dutch radio, the song is based upon Sammy's tourist impression of Amsterdam, such as the freedom he felt in the city.
According to Ian Christe's book Everybody Wants Some: The Van Halen Saga, Eddie and Alex Van Halen didn't like the lyrics, feeling the song did their birthplace a disservice, due to its explicit references to cannabis use (with lines such as "roll an Amsterdam" which undoubtedly references "rolling a joint") and to its little content. Hagar, however, wouldn't budge, as it was about his tourist impression over the memories of the Van Halen family homeland. About this, Eddie said to Guitar World in 1996:
"Well, I wasn't sober before, and I wasn't even listening to the lyrics! It's not like I suddenly wanted Sammy to be my puppet or anything, but once in a while I would take issue with a specific lyric or line. For example, I always hated the words 'wham, bam, Amsterdam,' from Balance, because they were all about smoking pot – they were just stupid. Lyrics should plant some sort of seed for thought, or at least be a little more metamorphical."[3]