Yes, it's true that the "Waldos" were some of the first people to coin the phrase 420, but, before the "Waldos" there was a band called, The Grateful Dead.
Supposedly, on April 20th (some year between 65' and 75') the band was trying to buy some weed. They put together all the money they had on their persons at the time, and it amounted to $420. On April 20th, The Grateful Dead bought $420 dollars of weed, and after they realized the coincidence, they decided that in light of the "herbal" phenomenon, they would smoke before any/every show, at 4:20 PM because most Dead shows started around 5ish. During the show, the Dead would entertain their audiences with stories about what happened before the show, or just any stories that they had. They would usually include any crazy "Trips" or "Thoughts" they had while they were high. Normally, in the middle of someone's story, another band member would chime in and say "Yeah, but you weren't feeling that way until 420". Once the hippies caught on, it was just a spiral Up from there.
Hippie A: Did you go to the show last night, man?
Hippie B: Yeah man, we even smoked with Jerry at 420! It was fuckin' sweet man!