First thing to remember, can rounds fragment at Range X, set by the loader at the commander's command, and that's the origin of the spread.
For rules, aim at a target point where you want the blast to start and roll to hit, with the final impact point where the can "pops." (Various rounds will use different technologies to initiate this.)
From the deployment point, use the searchlight template on page 60 to adjudicate what is hit. Treat each time it gets wider as a new range band with descending damage as for shotguns. Decide if you want to allow Mobility rolls to avoid the cloud of angry, steel bees.
As you seem to be thinking, you can use the cannon's HE round Blast rating as its damage, again reducing the rating when the searchlight template gets wider rather than at concentric rings of damage. Adjust your range by -100m from what your source tells you to account for the 10 hexes (100m) length of the searchlight template. Convert this to 10m hexes and that's your extreme range. Convert to short range (ie, divide by 8) for the Range stat.
Finally, research what cannons had canister rounds in the late '90s. The M256 didn't while the M68 did, for example.
Interesting. Most sources I found doesn't mention the delayed fuse at all, and the sources I did find mentioning it seems to be for the M546 howitzer round and that seems to work pretty well with the "searchlight model" you described.

(If someone can can explain how to read this diagram and work out a blast cone angle from it, I'd appreciate it).
It seems the 105mm M494 "Beehive" round uses a delayed fuze set to a range between 200 and 4400 meters. Later models of canister shot (105mm M1040 and 120mm M1028, neither available in Twilight 2000) seem to be strictly "muzzle action" though, with no delay.
It seems like we're dealing with two different types of rounds!
Rather than emulating any type of specific round directly I was aiming for a "general NAT0 105mm canister" for the L7/M68 gun, so I based it on the sparse info I could find here
https://en.wikipedia.org/wiki/105%C3%97 ... -personnel. The 10-degree is stated explicitly for the the Australian round, so I assumed (perhaps in error) this to be a rough standard.
Let's look at the rounds listed.
The Belgian M1204 is direct-fire "shotgun" type with no fuze, bet seems to have entered service in the 2000s, so that's out.
The Australian TC800 -might- have entered production in the 1990s, and is also a direct fire "shotgun" type. Notably, it's designed to reduce barrel wear, which seems to be a thing.
US M1040 seems to be the same as M1204.
The two Israeli rounds are both listed as entering service in the 2000s, so I'll ignore them too.
That leaves the UK L15A1 CAN, which is a tricky beast to find information on. There is an L15A1 120mm APDS round, and a L15A1 155mm HE round, but I can't find any information about a 105mm canister. If it exists, it's probably on the older side, since the last tank in British service with a 105mm was the Centurion.
So it seems like the unfuzed 105mm canister rounds were mostly a 2000s and later thing.
So what else?
There is the US M580 90mm round. With M47 (I think all the M48s were upgunned to 105mm) at this point Pattons possibly still being a thing (Greece, Turkey, former Yugoslavia, possibly Spain and Portugal), this might relevant. It's a delayed fuze round much like the M494. There is also the 90mm M336/M377/XM590 rounds, which are simple unfuzed rounds.
There's also the M581 106mm round for the M40 recoilless rifle. Also a delayed fuze round.
The US M625A1 round is a canister round for the 152mm gun/launcher on the M551 Sheridan. It's of the unfuzed variety.
There is also the 3Sh1 round for Soviet 122mm artillery. Delayed fuze round. It's been around since the 60's it seems.
The 76mm ARMDC (ARMoreD Car, I think) L21A1 is a simple unfuzed canister round for the 76mm cannons on the Saladin and Scorpion.
There is a 40x53mm canister shot round for the Mk.19 Automatic grenade launcher. But was adopted by the US in the 2000s so shouldn't be available in Twilight 2000, which I think we should all be grateful for.
I also found some canister rounds for 37mm, 45mm and 57mm cannons, but those seem too old for Twilight 2000.
So, a rundown of available canister rounds:
76mm: Direct fire canister.
90mm: Direct fire and delayed fuse for US high-velocity tank guns. Not for 90mm low-pressure guns, like on armored cars, Ikv91 and Scorpion 90 it seems.
105mm gun: Delayed fuze only it seems, for L7/M68 family of tank guns.
105mm howitzer: Delayed fuze or direct fire (same round, different setting) for US 105mm. NATO compatible?
122mm howitzer: Delayed fuze. Possibly able to be set to direct fire.
However, if you have a cannon and need to make your own ammo for it, direct fire, unfuzed canister shot is probably the easiest thing to improvise.
It's probably not great for the barrel though, but a lot worse for anyone standing in front of the barrel.
So that was a bunch of research, and I still dont have any rules for direct fire canister rounds that I like.
I'll retire to have another think, and leave you with some of the links I used for research.
bulletpicker.com
https://knds.com/media/catalogue_muniti ... 594873.pdf
https://man.fas.org/dod-101/sys/index.html