A functioning crackhead is somebody that is able to hold down a job and maintain a "normal" lifestyle while on crack, without completely sucumbing they're life to the drug.
Guy 1: For a hype, that dude sure has a decent house and job.
Guy 2: Yeah, thats because he's a functioning crackhead
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A crack head that does drugs and can still go to work, do school work, etc.
My uncle a functioning crackhead because he does crack and going to work.