They're talking about Pulp Fiction:

https://www.youtube.com/watch?v=fLIcFP0J5TY

                                     JULES
                         – Okay now, tell me about the hash 
                         bars?

                                     VINCENT
                         What so you want to know?

                                     JULES
                         Well, hash is legal there, right?

                                     VINCENT
                         Yeah, it's legal, but is ain't a 
                         hundred percent legal. I mean you 
                         can't walk into a restaurant, roll a 
                         joint, and start puffin' away. You're 
                         only supposed to smoke in your home 
                         or certain designated places.

                                     JULES
                         Those are hash bars?

                                     VINCENT
                         Yeah, it breaks down like this: it's 
                         legal to buy it, it's legal to own 
                         it and, if you're the proprietor of 
                         a hash bar, it's legal to sell it. 
                         It's legal to carry it, which doesn't 
                         really matter 'cause – get a load of 
                         this – if the cops stop you, it's 
                         illegal for this to search you. 
                         Searching you is a right that the 
                         cops in Amsterdam don't have.

"Royale with cheese" is part of the same scene.