Tetrahydrocannabinol (THC) is one of at least 113 cannabinoids identified in cannabis. THC is the principal psychoactive constituent of cannabis.

Reference: https://en.wikipedia.org/wiki/Tetrahydrocannabinol

Cannabidiol (CBD) is

Endocannabinoid System

Cannabis has 100s of cannabinoids and the two we are most familiar with are THC and CBD. These cannabinoids fit perfectly like puzzle pieces and bind with receptors found in our body. This system that interacts with these compounds found in cannabis is called the Endocannabinoid System.

The Endocannabinoid system is our 12th body system. This system regulates sleep, mood, appetite, and memory. Humans have receptors, CB1 and CB2 that receive cannabionoids such as THC from the Cannabis plant. The CB1 receptor is found in the central nervous system(brain) and the CB2 receptor is found near your liver.
Our bodies naturally produce two endocannabinoids, the anandamide and 2-archidonoylglyerol. These endocannabinoids bind to the receptor to produce a response in the body. For example to sleep or eat.

THC binds to your receptors just like the endocannabinoids do naturally! This then triggers the desirable effect such as reducing pain or increasing your appetite. 

What are terpenes?

Terpenes or Terpenoids are the flavor and aroma.
Terpenes have medicinal benefit binding to the cannabinoid receptor similar
to cannabinoids like THC or CBD.

Common Terpenes Found in Cannabis

Limonene – used in many household and cosmetic products. Limonene is a mood lifter. Helps
with acid reflux, anxiety, depression and possibly cancer growth. Benefits include elevated mood,
relaxation, and stress relief.

Bisabolol – Mild floral scent with skin healing properties that are found in cosmetic products.
Benefits include anti-bacterial, anti-inflamatory, and anti-irratation.

Pinene – Most common cannabis terpene. Pine cone smell and earthy aroma. Benefits include
creativity, alertness, focus, and memory retention.

Caryophyllene – This terpene has a spicy peppery flavor and aroma. Found in cloves.
Discovered to be the first non-cannabinoid to activate the cannabinoid receptor.
Benefits are elevated mood, stree relief, pain relief, anti-inflammatory and relaxation.

Humulene – is a powerful ant-inflamatory and pain reliever. Humulene is also an appetite supressant.
Myrcene – This terpene helps cannabinoids absorb to the brain. Found commonly in Indica strains,
myrcene is great for pain relief, stress, and muscle spasm. Excellent for sleep aid and

Terpinolene – Smokey or woody aroma. Benefits are pain relief, sedation, sleep aid,
antifungal, and anti-bacterial.