Michael Blow, 19, of Rochester, faced the Bendigo Magistrates' Court on Monday charged with the armed hold up of Rochester BP at 9.13pm on Saturday.

Detective Senior Constable Cherrie McCaig, of Echuca Police, said Blow "ran at the rear door with a knife" as one of the attendants took out rubbish after closing.

"The male came running from an alleyway yelling at the attendant, 'put money in the bag or I'll stab you," she said.

"The accused stabbed three or four times at the attendant's stomach but did not pierce her clothing.

"The accused was violent and continued to scream he would stab them throughout."

Detective Senior Constable McCaig said Blow left the scene with $350 in cash and later caught a taxi to the Victoria Hotel in Elmore where he was arrested at 11.12pm.

She said Blow had no recollection of the night up until police arrested him.

In applying for bail, defence lawyer Kate Youngson said the armed hold-up was Blow's first offence and prison would be detrimental to his mental health.

The court heard Blow had been admitted to mental health centres twice since his first registration in September 2012 and was a chronic schizophrenic.

Blow, a regular ice user, was receiving medication to treat his schizophrenia.

Blow's father Douglas told the magistrate his son had made progress in tackling his ice addiction in the past.

He said his son reverted to ice whenever he made contact with a group of friends in Rochester.

"Michael has known these bad influences for so long, it's a really difficult situation for all of the families involved," he said.

Magistrate Barry Schultz said cases such as Blow's always posed a challenge.

"We have to grapple with great sensitivity to all involved, including the concerns of the mother and father," he said.

"The mother has raised concerns about his long-term prognosis.

"The concerns of criminal justice and mental health have to be kept separate.

"It's not in Michael's interest to be kept in prison."

Blow was released into the custody of the Alexander Bayne Centre.

He was placed on a 9pm to 6am curfew, with all other hours to be supervised by his father.

The magistrate also banned Blow from travelling within five kilometers of Rochester and from making contact with two individuals in Rochester.

Blow will face a committal hearing in Bendigo in October.