If his answer to getting high with her is just a "shoulder shrug", he's telling you he wouldn't mind. Any sane father would be horrified -- the fact that he isn't suggests he's willing to allow it.
You need to start pushing boundaries. Next time the daughter is there when he is, say and do things to her in front of him. Tell her that she's looking really hot today or that she's "really grown up -- not many woman have breasts that gorgeous!". Give her hugs that take too long, slap her ass playfully, etc.
If your friend allows it, make sure to tell him later how hot it was to tell her she was hot or how nice it was to feel her rack squeezed up against you.
