Theresa May is facing increasing political pressure to review the law on cannabis after a raft of MPs including a former Conservative leader called for reform.
Lord Hague joined those who have urged a change of approach over the narcotic, writing in the Telegraph that the idea it can be "driven off the streets and out of people's lives by the state is nothing short of deluded".
His comments came after Health Secretary Jeremy Hunt suggested "a different way" was needed following widespread outrage over the confiscation from mother Charlotte Caldwell of cannabis oil supplies which she brought from Canada for her 12-year-old son Billy, who has acute epilepsy.
After Billy was rushed to Chelsea and Westminster Hospital on Friday night in a critical condition, having suffered multiple seizures, Home Secretary Sajid Javid granted a 20-day emergency licence allowing use of the oil.
On Monday, fellow Tory Crispin Blunt, who chairs the All-Parliamentary Group for Drug Policy Reform, urged the Home Office to "clear out of the way" and let the Department of Health take control of policy on medical cannabis.
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.
But Prime Minister Theresa May suggested that the Government would look only into the operation of the current system of licences for use in individual cases, rather than reviewing the law more widely.
The Home Office said the Government had no intention of reviewing the drug's classification.
Writing in the Telegraph, Lord Hague, who led the party from 1997 to 2001 and was foreign secretary under David Cameron from 2010 to 2014, called for the party to rethink policy, saying the war against the drug had been lost.
He wrote: "Everyone sitting in a Whitehall conference room needs to recognise that, out there, cannabis is ubiquitous, and issuing orders to the police to defeat its use is about as up-to-date and relevant as asking the Army to recover the Empire.
"This battle is effectively over."
Billy was discharged from hospital early on Monday afternoon, but now Ms Caldwell, 50, from Co Tyrone, wants an urgent review of the law on the substance, which is banned in the UK despite being available in many other countries.