a white paper on cannabinoids utilities ventures, inc. (otc:dutv) – february 2018 digital...

Digital Utilities Ventures, Inc. (OTC:DUTV) – February 2018

Digital Utilities Ventures, Inc. 71 Commerce Street Boston, MA 02109

Digital Utilities Ventures Inc. (OTC:DUTV)

Entering the Booming Cannabis Markets with New

CBD Products

A WHITE PAPER ON CANNABINOIDS



Cannabinoids – A Background

Digital Utilities Ventures, which trades on the over the counter market under the stock

symbol “DUTV” has targeted the medical and recreational segments of the cannabis

market. The core product line will be CBD and its medical derivatives and line

extensions. CBD (Cannabidiol) - is a non-psychoactive cannabis compound that has

significant medical benefits for the treatment of a wide range of conditions such arthritis,

diabetes, alcoholism, MS, chronic pain, schizophrenia, depression, antibiotic-resistant

infections, epilepsy, opioids and other neurological disorders. While the debate over the

legality of THC products still hangs in the balance on the federal and state levels, CBD

based products are legal and widely available in most states.

By following the lead of industry innovators and trailblazers, such as Terra Tech Corp.

(TRTC), Marijuana Company of America (MCOA), Sugarmade, Inc. (SGMD), and

mCig, Inc. (MCIG), Digital Utilities Ventures, Inc. is poised to become an industry

innovator by developing an end-to-end supply chain approach to the legal cannabis and

hemp markets. The Company's strategy is to develop through acquisitions and business

development a vertically integrated business model that covers the entire spectrum of the

CBD business from cultivation, through production, quality control and finally to

distribution through dispensaries.

To better understand Digital and its direction in the world of legal CBD products, a little

bit of knowledge about cannabinoids is helpful. In this white paper, we offer a very brief

tutorial on cannabinoids and the medical benefits of these plant-derived compounds.

While most investors have heard of THC (Tetrahydrocannabinol), which is the main

psychoactive ingredient in cannabis that produces a psychoactive effect, (gets people

“high”) THC is but one of over 100 different cannabinoids found concentrated in the

thick resins produced from cannabis flowers.

While many people still refer to cannabis flowers as “buds”, certainly the term “flowers”

is more appropriate and is currently the more modern terminology. Part of the structure

of the cannabis flower is the trichome, which contains the sticky resins that contain the

cannabinoids. And, by the way – the term used in the industry today is cannabis, not

marijuana.

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Please see Exhibit One for an example of the structures of the cannabis flower.

Exhibit One – Part of the Cannabis Flower

Source: Leafly.com

While THC is the cannabinoid that is psychoactive, there are many other cannabinoids,

which are non-psychoactive. The non-psychoactive cannabinoids is that is most often

discussed is cannabidiol, which is normally referred to simply as CBD. Entry into the

CBD markets is the stated direction of Digital.

While there are very large differences and how THC and CBD affect the human body,

chemically speaking, the molecules are very similar, as can be seen in Exhibit Two.



Some of the difference between these two compounds include:

• Psychoactive - As stated above, THC is the main psychoactive ingredient in

cannabis, while CBD is non-psychoactive. In other words, CBD does not produce

a high or euphoric feeling. DUTV plans to operate in the CBD markets, not in the

THC markets. This lowers the Company’s market risk, considering the changing

legal status of cannabis and to bank restrictions that still exist.

• Anxiety - THC sometimes causes people to feel paranoid or anxious, but CBD

often has the opposite effect. Many believe that certain CBD’s actually counteract

the anxiety that can be created by THC, although relative to this effect there is

mixed scientific evidence. While more research is being completed, there is a

growing body of scientific evidence indicating that CBD likely acts to reduce

anxiety when consumed without THC. We think products that combine THC and

CBC will be increasingly popular as the market continues to expand.

• Health Benefits - As we discussed below, there is a growing body of scientific

research showing various health benefits of THC and CBD. Due to restrictions

placed on the cannabis industry by various U.S. government agencies and those in

other countries, research into many areas of THC have been severely restricted,

while CBD research is to beginning to move forward – although still too slowly in

the option of most in the emerging cannabis industry. We believe it is important

to point out here, as we do below, that cannabinoids, and in particular CBD

products, are real medicine and that there is a growing body of scientific research

to support this view.

• Legality - The issue of legality of both THC and CBD is somewhat open for

interpretation. For all practical purposes, CBD is legal in most states. Some still

argue that CBD are illegal at the federal level, but for all practical purposes and

considering that federal enforcement is virtually nonexistent, CBD are effectively

legal throughout the United States. The story relative to THC is very different and

still illegal under the Controlled Substances Act. The federal government,

however, is taking a hands-off approach relative to enforcement as long as

manufacturers and marketers of THC containing products are in “strict

compliance” with state and municipal regulations.



Exhibit Two – THC Versus CBD – Chemically Similar, But Still Very Different

Source: High Times Magazine

Cannabis Legal Status

Please see Exhibit Three for a map of U.S. states where THC-based cannabis products

hold legal status.

This map was current as of January 16, 2018 and outlines the states and the District of

Columbia that currently have laws broadly legalizing cannabis in some form.

This list changes fast with more and more states putting forth legislation to legal both

medical and recreational cannabis.



Exhibit Three – Cannabis Legal States

Source: Cannabis Legal Review

Notes to Exhibit Three

Some states shown above with no laws broadly legalizing medical marijuana provide limited access under certain

circumstances. States like Alabama and Mississippi, for instance, maintain laws permitting medical marijuana for

severe epileptic conditions. Other states, such as Virginia, enacted laws decades ago allowing for the possession of

marijuana if individuals received prescriptions from doctors. Federal law, however, prohibits doctors from prescribing

marijuana, rendering those laws invalid. Doctors can only write a recommendation for medical marijuana, which is

different than a prescription.

New Jersey is rapidly moving toward legalization, as is New York and Massachusetts. The people of Arizona will be

able to vote on recreational legalization on the November 2018 ballot. The governor of Vermont signed a bill

legalizing recreational usage on January 22, 2018.

Many more states are expected to follow suit during the remaining portion of 2018.



How Cannabinoids Work on the Human Body CBD, THC, and the more than 100 other cannabinoids, can have a profound effect on the

human body. Research during the 1960s on how THC creates the psychoactive effect on

the human body led to the discovery of the endocannabinoid system of the human body.

Exhibit Four shows many of these cannabinoids and some of the effects these have on the

human body. It’s incredible, but scientists are still finding new components of the

cannabis plant and its flowers.

Exhibit Four – THC and CBD our cannabinoids but there or more than 100 additional

Source: National Institutes of Health, Atlanta, GA, USA



The endocannabinoid (ECS) system is quite remarkable, and quite complex (please see

Exhibit Five) therefore, much of a discussion about its functionality is beyond the scope

of this investor related report. However, the ECS is a system that all humans have with

their bodies that maintains balance at a cellular level. The ECS is a collection of

cannabinoid receptors on many different types of cells within the human body. While

these receptors are found throughout the body, the main concentrations are in the central

nervous system, on immune related cells and in the gastrointestinal tract.

The human body produces its own cannabinoids, which act as chemical messengers to

communicate various functions to different types of cells regulating important human

functions such as appetite, sleep, mood, pain, memory, and even temperature regulation.

Exhibit Five – The Complex Endocannabinoid (ECS) System



Notes to Exhibit Five:

There is a physiological reason the cannabinoids THC and CBD are very safe for human consumption – while our

brains have significant concentrations of cannabinoids receptors, there are incredibly few in the stems of our brains.

This means, unlike other drugs, opiods for example, that act directly on the brain stem, cannabinoids can’t stop our

hearts or breathing. There still has never been a documented case of an overdose of THC, CBD or any other

cannabinoids or cannabis product.

When THC is consumed through cannabis, the THC molecules directly bind to these

cannabinoids receptors in the brain producing the psychoactive “high” that is felt by the

user. While THC binds directly to these cannabinoids, other cannabinoids, in particular

CBD, because of its slightly different molecular composition, is unable to directly bind to

the receptors. Instead, through a series of reactions, which are outside the scope of this

report, CBD increases the amount of other cannabinoids that are available to bind to the

receptors. The net effect is additional beneficial cannabinoids in the system, which bind

to the receptors creating positive health effects.

Because CBD does not bind directly to the receptors, but instead, increase the amount of

natural occurring cannabinoids available to bind to receptors, there are very few side

effects from CBD.

In many ways, CBD products are almost a “miracle drug” in that positive benefits are

achieved, while side effects are extremely minimal. CBD products are simply causing the

human body to more of something its already doing. While this is an oversimplification –

it suits our purpose of explaining this to investors and non-scientific personnel.

Positive Effects of CBD on the Human Body are Proven - But More Research Needs to be Completed

Early in 2017, the National Academy of Sciences produced a report called: The Health

Effects of Cannabis and Cannabinoids: The Current State of Evidence and

Recommendations for Research.

This was groundbreaking research!

The report was produced by a committee of leading researchers that was tasked with

reviewing the scientific research relative to the health benefits of cannabis. The members

of the committee were from some of the most prestigious universities and research

institutions in the United States, including Harvard University, University of California,

John Hopkins University, Columbia University, University of Pennsylvania, Vanderbilt



University, Duke University, with an additional approximately twelve other prestigious

institutions included.

Exhibit Six - Major Study of the Effects of Cannabis and Cannabinoids Published by the National Academies of Sciences

The findings of the committee were groundbreaking.

The report outlined more than 100 different research conclusions and a host of additional

conclusions relative to research recommendations.

For example:

• There is conclusive or substantial evidence that cannabis or cannabinoids are

effective for the treatment of chronic pain and treatment of chemotherapy related



nausea and vomiting. This finding alone is highly significant considering the

rampant opioid addiction in the United States.

• There is moderate evidence that cannabis or cannabinoids are effective for

improving short-term sleep outcomes associated with sleep apnea, fibromyalgia,

chronic pain, and multiple sclerosis.

• There is some evidence to suggest that cannabis or cannabinoids are effective for

increasing appetite for HIV/AIDS patients, improving multiple sclerosis spasticity

symptoms, improving Tourette’s syndrome symptoms, and improving symptoms

of anxiety.

• There is almost no evidence to suggest that cannabis use increases the incidence

of certain cancers including: lung, head and neck, esophageal, prostate, cervical,

and many other cancers.

• There was also no evidence to suggest that the use of cannabis triggers heart

attacks, stroke or contributes to pre-diabetes.

These findings are quite remarkable in that these show strong health benefits relative to

certain conditions while also pointing to very low side effects.

It is also quite remarkable that this report was proposed, completed and published at all.

While the National Academy of Sciences, the organization that produced the report, is a

private organization of researchers and not directly associated with the U.S. federal

government, most members of the Academy nevertheless rely very significantly on

government grants for their research. In many ways, the conclusions of the report directly

contradict the rationale for keeping cannabis “illegal” at the federal level.

Many other studies have paralleled the findings in the National Academy of Sciences

report that was published early in 2017. Based on the Academy’s findings and those of

many other researchers it is very clear that cannabinoids offer considerable human benefit

with very few side effects.

In our opinion, the findings of the report mean the world of cannabis and cannabinoids

will never be the same.

Digital’s Product Direction in Cannabis and CBD Digital plans to specialize in the cannabidiol (CBD) marketplace via the offering of

various products to both distributors and end customers.

Pat Scorzelli, CEO of Digital recently commented, "While we are not making definitive

relationship announcements at this time, we believe it is important, considering the



uniqueness and the strong patent protection already awarded to these products, to inform

our investors that these negotiations are currently in the very late stages. There are

certainly other CBD products out on the marketplace, but very few with strong

intellectual property and patent protections - we plan a very different and unique product

approach compared to the competition. In this regard, we believe Digital can emerge as a

fast-growing player in the booming legal cannabis sector."

Mr. Scorzelli continued, "Through my experiences in the development of cannabis

cultivation facilities and dispensaries, and via my time spent in the cultivation and

extraction arenas, I have become more confident than ever about the strong benefits of

cannabidiol. I hope to bring these experiences to this growing marketplace in a unique

way by linking the cultivation and extraction sectors directly to several unique and

patented consumer CDB products. We plan to provide more details to Digital investors as

soon as negotiations are completed."

The Digital management team also indicated that the company is not looking to do a

reverse split now or in the future. "Whenever a company moves in a new direction, talk

naturally turns to questions about a reverse split," says Scorzelli. "We simply don't feel it

will be necessary with the plans we have for DUTV. As we move forward, it is our hope

shareholders feel confident in their position with the company both now and in the long run."

This White Paper may include statements that may constitute "forward-looking"

statements, usually containing the words "believe," "estimate," "project," "expect"

or similar expressions. These statements are made pursuant to the safe harbor

provisions of the Private Securities Litigation Reform Act of 1995. Forward-

looking statements inherently involve risks and uncertainties that could cause

actual results to differ materially from the forward-looking statements. Factors

that would cause or contribute to such differences include, but are not limited to,

acceptance of the Company's current and future products and services in the

marketplace, the ability of the Company to develop effective new products and

receive regulatory approvals of such products, competitive factors, dependence

upon third-party vendors, and other risks detailed in the Company's periodic

report filings with the Securities and Exchange Commission. By making these

forward-looking statements, the Company undertakes no obligation to update

these statements for revisions or changes after the date of this release.

SOURCE: Digital Utilities Ventures, Inc.

a white paper on cannabinoids utilities ventures, inc. (otc:dutv) – february 2018 digital...

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