Hemp (Cannabis sativa L.) synthesizes and accumulates a number of secondary metabolites such as terpenes and cannabinoids. They are mostly deposited as resin into the glandular trichomes occurring on the leaves and, to a major extent, on the flower bracts. In the last few years, hemp for production of high-value chemicals became a major commodity in the U.S. and across the world. The hypothesis was that hemp biomass valorization can be achieved through distillation and procurement of two high-value products: the essential oil (EO) and cannabinoids. Furthermore, the secondary hypothesis was that the distillation process will decarboxylate cannabinoids hence improving cannabinoid composition of extracted hemp biomass. Therefore, this study elucidated the effect of steam distillation on changes in the content and compositional profile of cannabinoids in the extracted biomass. Certified organic CBD-hemp strains (chemovars, varieties) Red Bordeaux, Cherry Wine and Umpqua (flowers and some upper leaves) and a T&H strain that included chopped whole-plant biomass, were subjected to steam distillation, and the EO and cannabinoids profile were analyzed by gas chromatography-mass spectrometry (GC-MS) and HPLC, respectively. The distillation of hemp resulted in apparent decarboxylation and conversion of cannabinoids in the distilled biomass. The study demonstrated a simple method for valorization of CBD-hemp through the production of two high-value chemicals, i.e. EO and cannabinoids with improved profile through the conversion of cannabidiolic acid (CBD-A) into cannabidiol (CBD), cannabichromenic acid (CBC-A) into cannabichromene (CBC), cannabidivarinic acid (CBDV-A) into cannabidivarin (CBDV), cannabigerolic acid (CBG-A) into cannabigerol (CBG), and δ-9-tetrahydrocannabinolic acid (THC-A) into δ-9-tetrahydrocannabinol (THC). In addition, the distilled biomass contained CBN while the non-distilled did not. Distillation improved the cannabinoids profile; e.g. the distilled hemp biomass had 3.4 times higher CBD in variety Red Bordeaux, 5.6 times in Cherry Wine, 9 times in variety Umpqua, and 6 times in T&H compared to the original non-distilled samples, respectively. Most of the cannabinoids remained in the distilled biomass and small amounts of CBD were transferred to the EO. The CBD concentration in the EO was as follows: 5.3% in the EO of Umpqua, 0.15% in the EO of Cherry Wine and Red Bordeaux and 0.06% in the EO of T&H. The main 3 EO constituents were similar but in different ratio; myrcene (23.2%), (E)-caryophyllene (16.7%) and selina-3,7(11)-diene (9.6%) in Cherry Wine; (E)-caryophyllene (~ 20%), myrcene (16.6%), selina-3,7(11)-diene (9.6%), α-humulene (8.0%) in Red Bordeaux; (E)-caryophyllene (18.2%) guaiol (7.0%), 10-epi-γ-eudesmol (6.9%) in Umpqua; and (E)-caryophyllene (30.5%), α-humulene (9.1%), and (E)-α-bisabolene (6.5%) in T&H. In addition, distillation reduced total THC in the distilled biomass. Scanning electron microscopy (SEM) analyses revealed that most of the glandular trichomes in the distilled biomass were not disturbed (remained intact); that suggest a possibility for terpenes evaporation through the epidermal membrane covering the glandular trichomes leaving the cannabinoids in the trichomes. This explained the fact that distillation resulted in terpene extraction while the cannabinoids remained in the distilled material.