The use of medicinal cannabis is to be reviewed, which could lead to more prescriptions of drugs made from the plant, the home secretary has said.
The decision was prompted by recent high-profile cases of children with severe epilepsy being denied access to cannabis oil to control seizures.
But Sajid Javid stressed the drug would remain banned for recreational use.
Charlotte Caldwell, whose son Billy has severe epilepsy, welcomed the decision after campaigning for change.
Speaking to the House of Commons, Mr Javid said the position “we find ourselves in currently is not satisfactory”.
He said the cases of Alfie Dingley and Billy Caldwell had made him conclude it was time to review the use of cannabis for medicinal purposes.
He also announced that six-year-old Alfie, who has a very rare form of epilepsy that causes up to 150 seizures per month, was being issued with a licence to receive cannabis-based drugs.
His family had originally applied to the government in April, saying his condition improved after using cannabis oil in the Netherlands.
Meanwhile, Billy, 12, was granted a 20-day licence for the drug last week after doctors made clear it was a medical emergency.
He was admitted to hospital after his seizures “intensified” following his supply being confiscated at Heathrow Airport.
His mother Charlotte, speaking after Mr Javid’s statement, said: “Common sense and the power of mothers and fathers of sick children has bust the political process wide open and is on the verge of changing thousands of lives by bringing our medicinal cannabis laws in line with many other countries.”
But she added that while it was a “clearly largely positive” announcement, “we still want to hear the details”.
Shadow home secretary Diane Abbott welcomed Mr Javid’s statement, telling MPs that it was “long overdue”.
The review would be held in two parts, Mr Javid told MPs. The first will make recommendations on which cannabis-based medicines might offer real medical and therapeutic benefits to patients.
In the second part, the Advisory Council on the Misuse of Drugs will consider whether changes should be made to the classification of these products after assessing “the balance of harms and public health needs”.
He said: “If the review identifies significant medical benefits, then we do intend to reschedule.”
The UK’s drugs regulations currently divide drugs into five “schedules”, each specifying in what circumstances it is lawful to possess, supply, produce, export and import them.
Cannabis is currently Schedule 1, meaning it is thought to have no therapeutic value and therefore cannot be lawfully possessed or prescribed, but can be used for the purposes of research with a Home Office licence.
Drugs in Schedules 2 and 3, such as methadone, can be prescribed and therefore legally possessed and supplied by pharmacists and doctors.
But Mr Javid added that the move to review medicinal cannabis use was “in no way a first step to the legalisation of cannabis for recreational use”.
That followed calls from former Conservative leader Lord Hague, who said the government should consider legalising the recreational use of cannabis.
But NHS England chief executive Simon Stevens said it was important not to confuse the debate “without at the same time reminding ourselves that there are some genuine health risks” associated with smoking cannabis.
Does cannabis have medicinal benefits?
By Michelle Roberts, BBC News online health editor
Cannabis contains different active ingredients and experts say some of them might be therapeutic for certain patients.
THC or tetrahydrocannabinol is the part that makes people feel “high”, but CBD or cannabidiol is another component found in cannabis that scientists are interested in understanding more about as medical treatments.
CBD-based treatments have shown some promising results for reducing seizures in children with severe epilepsies.
Medical trials of cannabis-based medicines have largely focused on pharmacological preparations, but some parents of children with epilepsy have been buying oils containing CBD and THC.
There is currently little scientific evidence on the safety and effectiveness of these oils as a treatment for epilepsy, although they do contain the same active ingredients.
Some health food shops sell CBD oils as food supplements. These have low levels of active ingredient and are legal to buy in the UK.
It is vital that you talk to your doctor or health professional before making any changes to your epilepsy medication.