From The Art and Popular Culture Encyclopedia
Hallucination Generation is a 1966 film by Edward Mann. Purportedly intended as a warning against the dangers of pill-popping Sixties hedonism along the lines of 1936's Reefer Madness, the film's primary purpose appears to have been titillation, thus landing it in the genre of exploitation cinema.
The film is a drama set in Spain where a small group of American young adults is living. The leader of the group is a drug dealer. The others are there living carefree lives as beatniks. The leader has more nefarious aims in mind, and uses drugs to lure the others into lives of crime. Most of the film is in black and white, but there is a psychedelic sequence depicting the purported effects of the group using LSD which was filmed in color.
It is often cited as an example of counterculture cinema.