It means that the target is in a bad mood or in unnecessary distress, and you are implying this with the notion of them having a stick in their anal cavity, which, of course, is very painful and would definately cause a rather pissy mood. It's a way of telling them to STFU. However, this phrase is not recommended around people who constantly make Yo Mama jokes. A similar thing to say would be telling them this with the Sandy Vagina phrase.
Guy 1: Dude, I have so much damn homework I'm gonna tear someone's freakin eyes out! Aaarrgh! *throws nearby freshman out a window*
Guy 2: Dude pull the stick out of your ass!
A phrase used to describe someone pulling out a firearm, usually a shotgun, then shooting a target in the head. The phrase has absolutely no other possible meaning. After all, High Boi used it, so no more explanation is necessary.
When a sound whore tries to attack you, just play some earrape, then pull out the blicky and do a sticky