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Solvent-free microwave-assisted extraction (MAE) is a green extraction method capable of boosting the yield and quality profile of hemp essential oil when compared with other conventional extraction techniques. During this process, two by-products are produced, namely the aqueous residue containing bioactive phenolics and the residual deterpenated biomass, which can be used for further extraction and purification of phytocannabinoids. To date, the hemp industry has not utilized these products, although they can be valuable for the food, cosmetic, nutraceutical and pharmaceutical market.This study assessed and optimized the variables affecting MAE efficiency, namely microwave irradiation power, extraction time and added water, which were studied using a central composite design approach, and results were used to optimize the extraction process for recovering three valuable fractions: essential oil, polyphenols and phytocannabinoids. The products obtained using the optimized conditions were characterized in terms of yield, chemical profile and antioxidant potential. Moreover, the by-products obtained during the optimized run were further analyzed in terms of their biological activity using both enzymatic and non-enzymatic assays. The aqueous residue demonstrated a powerful α-glucosidase inhibition, a good activity in terms of superoxide radical scavenging activity, a modest efficacy in terms of inhibition of advanced glycation end products formation and no activity in terms of lipase inhibition. The residual deterpenated biomass did not possess significant biological activity.This work demonstrated valorization of industrial hemp essential oil and its by-products, obtained by a sustainable and eco-friendly extraction method, through an almost waste-free approach. Cannabinoids as well as other valuable bioactive compounds such as glycosidic flavones may be recovered from the residues of the essential oil extraction, representing interesting substances in the pharmaceutical, cosmetic and nutraceutical fields. © 2022 The Authors. Journal of The Science of Food and Agriculture published by John WileySons Ltd on behalf of Society of Chemical Industry.