How do you use the water cannon in Marvel Spider Man ultimate power?

The water cannon is a pre-run Boost available to purchase JUST before starting your run. It is not available in the item shop, nor as an in-game pickup item like Magnets or Shields:

According to the info button, it can be used up to 3 times to disable Sandman's attacks:

How to use it

When you purchase it, you get a new button on the run screen, just to the left of the punch button. Pressing it will activate one of the charges of the water cannon–whether Sandman is on screen or not!

Its price to performance isn't worth it

I wouldn't recommend purchasing it unless youre struggling with Sandman's attacks. Once you get the hang of them, they aren't that hard to dodge, and the cost of the item (8 ISO-8 crystals) is pretty steep, especially now that the store is defunct and you can't purchase more ISO-8.

The only time the water cannon may be more useful is in the Sandman boss fights, where you know youre going to be facing him more regularly.

You also mention you saw it as a daily task (to earn ISO-8 jewels). Unless the reward amount of ISO-8 is greater than the cost of purchasing the water cannon (8), I dont think its worth it. Just leave this objective and hope to re-roll a better objective tomorrow.