Let's say you issue the git stash command and "needs merge" is displayed.

~]$ git stash
example.py: needs merge
error: could not write index

If you are not familiar with stashing, check out my article FreeKB - Git (Version Control) - Stashing changes. And let's say the git status command returns something like this, where the file is question has "both modified".

~]$ git status
On branch feature/foo
Your branch is up to date with 'origin/feature/foo'.

Unmerged paths:
  (use "git restore --staged <file>..." to unstage)
  (use "git add <file>..." to mark resolution)
        both modified:   example.py

no changes added to commit (use "git add" and/or "git commit -a")

As the output suggests, one solution is to unstage the "both modified" file.

git restore --staged example.py

And then if the git stash command works properly, you should be good go to.

~]$ git stash
Saved working directory and index state WIP on feature/foo: a9cd2ff2 my commit message