1. slang Marijuana, especially of inferior quality. I can't believe they expelled him for selling a little bit of schwag out of his car. I've been unemployed for the past few weeks, so all I can afford is this skunky schwag.

2. slang Merchandise or small promotional items given away at events such as conferences. A variant spelling of "swag." Look at all the schwag I got at that HR conference! Pens, a clipboard, even a beach ball! I hear they're giving away all sorts of sweet gaming schwag from their booth at the expo.