The cannabis entourage effect was first discovered by researchers Raphael Mechoulam and Shimon Ben-Shabat in 1998.

They found that inactive compounds improved the therapeutic ability of the body’s primary endocannabinoids (naturally-produced compounds): 2-AG and anandamide. THC and CBD work just like these compounds.

In 2001, Ethan Russo and John McPartland published the paper, “Cannabis and Cannabis Extracts: Greater Than the Sum of Their Parts.” This research supported the “entourage effect” hypothesis.

Their research found that “secondary compounds in cannabis may enhance the beneficial effects of THC” and “may reduce THC-induced anxiety, cholinergic deficits, and immunosuppression.” 

Researchers also stated that “cannabis terpenoids and flavonoids may also increase cerebral blood flow, enhance cortical activity, kill respiratory pathogens, and provide anti-inflammatory activity.”

In a 2011 review of studies, titled “Taming THC: potential cannabis synergy and phytocannabinoid-terpenoid entourage effects,” researchers found that consuming terpenes and cannabinoids together may be helpful for:

Cancer
Pain
Anxiety
Epilepsy
Inflammation
Fungal infection 
In a 2015 study on CBD isolate effects were compared against effects from full-spectrum extracts. In the study, researchers found that mice treated with full-spectrum products experienced significantly more relief than those who only took CBD isolate.

In addition, researchers found that full-spectrum CBD did not lose efficiency with higher doses, while CBD isolate did.