"Cases like Billy's. and others like him have shown that we now need to look more closely at the use of cannabis-based medicines in the healthcare sector in the United Kingdom", he said.
Challenging the government to emulate the ruling Liberal Party government in Canada which is on the "verge of agreeing something much more radical: a legal, regulated market for cannabis for recreational use", Hague appealed to the Tory's claim of being the party of pragmatism.
Home Secretary Sajid Javid told lawmakers cases like that of a 12-year-old epileptic boy denied cannabis oil for his condition showed there is "a pressing need to allow those who might benefit from cannabis based medicines to access them".
He also announced that a licence will be given to Alfie Dingley, a six-year-old boy suffering from a rare form of epilepsy, to allow treatment with cannabis-based drugs.
The Government announced a new expert panel of clinicians would be established to give swift advice on the prescription of cannabis-based medicines to individual patients. Schedule 1 drugs can be used for research purposes and clinical trials but only under a Home Office license.
Billy's mother Charlotte described it as "amazing news" which she "applauded".
"This battle is effectively over", he added.
Liberal Democrat leader Sir Vince Cable backed calls for reform, telling BBC Radio 4's Today programme that decriminalising cannabis would be a "sensible step for the country to take". "Let's be clear: actually it isn't", he said.
Alfie's family applied to the government to be able to use cannabis oil medication in April but is yet to receive a decision.
She said the "time for process and bureaucracy has passed".
Hunt said "I don't think anyone who followed that story could sensibly say that we are getting the law on this kind of thing right".
Led by chief medical officer Dame Sally Davies, the panel is a sign that the government might be willing to shift its stance on the issue.
Hague's comments come as pressure mounts on the Home Office to implement a review of its existing medical cannabis policy, in order to bring it in line with other Western nations.
The Advisory Council on the Misuse of Drugs will consider in the second part of the review whether changes should be made to the classification of these products on an assessment of "the balance of harms and public health needs".
"On this issue, the facts have changed very seriously and clearly".
"There's a very good reason why we've got a set of rules around cannabis and other drugs, because of the impact that they have on people's lives, and we must never forget that".
Currently, the United Kingdom government does not recognise cannabis as having any therapeutic properties.