Police members say they saw Jason Donnelly, 29, asleep in a car at 2.45am on April 3 in the Delacombe Town Centre carpark.

The car had its headlights on and engine running with another sleeping male inside.

Donnelly made an application for bail at the Ballarat Magistrates' Court on Monday and the court heard police decided to search the car after smelling cannabis.

Officers allegedly found electronic scales, seven bags of cannabis, two bags of a crystal substance believed to be methamphetamine weighing a total of 10 grams, cannabis, diazepam and a bottle of GHB.

The court heard Donnelly had a large amount of cash, an extendable baton and messages on his phone about trafficking the drugs.

"Multiple notifications on his phone lead police to believe he is involved in high level drug trafficking," a police officer said.

Defence lawyer Sarah Wiltshire said Donnelly could be released on bail to live at his stable address in Mount Pleasant and he was assessed as suitable for the Court Integrated Services Program.

Magistrate Hugh Radford granted bail with conditions that Donnelly report to the Ballarat Police Station daily, not to drive, not to contact witnesses, not to use drugs and to abide by a 9pm to 6am curfew.

He will return to court in June.

"If you want to continue dealing in drugs, driving a motor vehicle or going out after hours you will be back where you are," Mr Radford said.

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