“The friends … met after school, at 4:20pm, and drove off on their treasure hunt. … The group began using the term 420. So did friends and acquaintances, who included - at a couple of steps removed - members of the Grateful Dead rock band. The term spread among the band’s fans, known as Deadheads.”
–Was my interpretation of the “at a couple of steps removed” (= people not so close to them) correct?
Yes, that’s what it means.