The word shady can be used as either a verb or an adjective to describe anything really. Something shady can be either good or bad. The word shady is most often used when talking about marijuana. Examples are given below:
Smoking ganja in a police station is shady. However, if you find a cool little spot that nobody is ever going to find where you can smoke up then that little place is well shady.
Right there's more.
You can say that a crappy deal when buying dope is damn shady, but another use is if somebody is wearing really odd clothes - that person is pretty shady!
The word shade
can be used as a verb, e.g. dude lemme shade some tokeage= let me smoke some of your joint. (to toke:D)
Also, one can say "dude lets shade off and go bun" - shade meaning walk off or something.