Thai farmers welcomed a new law allowing cultivation and use of marijuana for medical purposes Wednesday, in an Asian first that promises an economic bonanza but also fears that foreign companies could reap the rewards.

Thailand's National Assembly passed a bill Tuesday legalising the use of marijuana and kratom -- a traditional herb -- for research and medical use.

The move is a significant step for a region that levies harsh sentences for drug violations. It would also allow for the production, import and export of marijuana.

The bill, which still outlaws recreational use and has strict limits on the amount an individual can carry, requires royal assent to come into law, said National Assembly member Jet Sirathronont.

The National Farmers Council of Thailand praised the law as providing a "new economic crop" to help farmers diversify their production.

"I expect Thailand can make 100 billion baht a year (US$3.07 billion) from growing cannabis and selling the raw material and cannabis oil," chairman Prapat Panyachartrak told AFP.

But some fear foreign companies and pharmaceutical giants are in pole position to scoop up valuable patents to produce the medical cannabis and extracts.

Those holding the patents could stop Thai universities and government agencies from conducting research, warned Witoon Liamchamroon, director of BioThai, a network of agricultural activists, farmers and academics.

The Commerce Ministry had promised to "revoke" the petitions of foreign companies, he said, "but so far, we checked and there is no revocation."

Long time cannabis activist Buntoon Niyamabhra called on the government to cancel patent applications from foreign multinationals.

"Otherwise Thai people will not get any benefits... as the patent law is retroactive once the new law takes effect," he told AFP.

Thailand has a long history with cannabis.

Marijuana was once classified as a traditional herb before it was re-categorised as a narcotic in the 1970s -- which prohibited its production, consumption, sale and possession.

It remains readily available despite high penalties for those caught smoking it.

But Buntoon, who founded the Network of Cannabis Users in Thailand in 2013, said marijuana was once used in more than 100 formulas of Thai traditional medicine.

"I have used cannabis for more than 50 years," he told AFP. "Cigarettes and whisky are more harmful to your health."

Several nations have embraced the use of medicinal cannabis, including Canada, Australia, Israel, and more than half the states in the US.

US-based Grand View Research has estimated the global market for medical marijuana could reach $55.8 billion by 2025.