In an interview with Artist Direct, Melanie said “Mad Hatter” is about “being okay with being crazy”:

[Cry Baby] wouldn’t have it any other way. That is who she is and cannot fight it. That’s how I am at this point.

She also told Noisey Vice that the song is “very lyrical, very hip-hop. I wanted it to be about my transition and Cry Baby’s transition into embracing who we truly are. Crazy people.”

The story and illustration for this song appears on the final page of the Cry Baby storybook, reading:

Cry Baby sat and disagreed
Imperfect, insane, and emotional was she
But she feels safe, going to sleep
And there’s no one else that she’d rather be

Melanie Martinez released the music video for “Mad Hatter” on September 23, 2017. It features Melanie’s character, Cry Baby, in her room smoking when she notices a bottle with a label that says “Drink Me”, a parallel with the trope from Alice in Wonderland. Cry Baby drinks the liquid and passes out, fading into a pastel, nightmarish Wonderland. Via Instagram, Melanie explained that the stuffed animals are supposed to represent her closest friends and how they’ve helped her out of situations where she was forced into being something she isn’t. In the music video, Cry Baby is shown in various terrifying situations, from which her stuffed animal friends save her.