This was Hendrix's American stage debut as The Experience. The Monterrey Pop Festival in June 1967 came only a few short months after his debut in England. This song was his first tribute to Bob Dylan.* Dylan had been invited to the Monterrey festival but declined for who knows what reason(s). Jimi's reference to "Bob Dylan's grandma over there" was a dig at bassist Noel Redding who sported "granny glasses" and a dylan-esque afro. The two never did get on together and Hendrix ultimately replaced Redding with Billy Cox who is the last surviving bandmate.
* The second one being his recording of "All Along The Watchtower" a year later.