UPDATE -- Lindsay's rep Steve Honig has called and expressed his disapproval of this story. He has given us the following statement, "The bag contained crystals that had been purchased for Lindsay at a local shop."

Lindsay Lohan hung out with new friends outside of Hal's Bar & Grill in Venice Beach ... not far from her home.

The 25-year-old actress kept busy writing in a notebook and smoking cigarettes ... while those around her kept watch.

At one point, Lindsay can be seen taking a bag from a friend. Her friend checks out the contents of the bag and eventually, Lindsay takes a different bag from another guy and hands over the cash to pay for it. She then took time to chat with some young fans passing by.