Street slang for
PCP (that's
angel dust, kids). The term seems to be most commonly used in
hip-hop culture.
Alternatively, a cigarette or joint dipped in embalming fluid.
In both cases, it's not exactly good for the body and mind. Thus, the phrase "Are you smoking sherm?" is sometimes used in place of the much more common "Are you smoking crack?" when the speaker is questioning the sanity of his or her audience.