The state of drunkenness achieved by young people on Halloween. Since alcoholic beverages are always abundant on this holiday and most people are either wearing enough clothes to cover their identity or not enough clothes to cover their undergarments, people always seem to get extra hammered.
The phrase plays off the second line of the chorus in the popular Halloween song 'The Monster Mash', "It was a graveyard smash".
Yeah man, that guy was graveyard SMASHED!