Hemp (Cannabis Sativa L.) is a broadly grown plant worldwide. In recent years, the cannabidiol (CBD) and terpene species in hemp have drawn increasing research interests due to their human health benefits and pharmaceutical values such as anti-anxiety, pain-relief, relaxation promotion, anti-inflammation and antimicrobial activities. However, the research and application of hemp CBD and terpenes in food systems are scarcely reported, because of various legal regulations, consumer basis and technological challenges. In addition, processing technologies of hemp such as drying, extraction and purification for stable productions of high quality and food-safe CBD and terpene for food purposes have not been extensively studied, lacking thorough reviews. Therefore, in this comprehensive review, the basic characteristics of hemp CBD and terpenes, and their related legal regulations around the world are summarized; the status and technological challenges in the incorporation of hemp CBD and terpenes in food products, and in processing technologies of hemp biomass are identified and discussed; potential solutions, future trends, and research needs are highlighted. The findings from this review may excite more food-related research on hemp processing and CBD/terpenes applications in foods. It can also help the hemp industry to improve the processing efficiency of hemp as a valuable bioresource, and for food manufacturers to shape their paths to use hemp CBD and terpenes as future functional food ingredients.