Just make sure to teach him to ask people before he hugs them.
We encourage hugs at our preschool and think it is adorable- It's friendly and loving- The older he gets- he should learn to ask- "Can I give you a hug?" and should be taught to hug as a teen from side to side and not full front-on...
the whole male- male thing is no problem for us at age 2-5- Someone else might say it will just starts to be more masculine after age 5 male- male to give high fives etc or "the brick knuckles" :-)
Basically you need to feel out the tolerance level in your playgroups for affection..... When and if you are ready to discourage it, tell him "it's just a rule"- because "a rule" is whatever YOU say it is!
NOW there are schools out there- and I know this sounds crazy- not sure how many that have zero tolerance for PDA- I am sure there is some cooky principal that may try to discipline a kindergarten student for kissing on the playground. (maybe even hugging?) Ask your school.