Green’s Dictionary of Slang

1. uncured marijuana [SE bad + shit n. (5b)].

1951

Kerouac On the Road (The Orig. Scroll) (2007) 284: Finally he got hold of some bad s--t [...] green, uncured marijuana.

2. better than average marijuana [bad adj. (3) + shit n. (5b)].

1979

‘Iceberg Slim’ Airtight Willie and Me 214: ‘I just wanted to share this bad shit with you,’ she crooned as she lit the bomber.

3. anything good [bad adj. (3) + shit n. (3f)].

1974		R. Greenfield S.T.P. 316: [of a strong drug] ‘That’s bad shit, man.’ ‘Doc, doc,’ the horn player moans, slumping in his seat, [...] ‘I need an amy.’.
1989		H. Rawson Dict. of Invective (1991) 351: bad shit. [...] in black English, very good.
1992		R. Price Clockers 17: That’s some bad shit for a kid, them blocks.