Cryptic crossword clue
Canned outside hotel and diluted 7

The most common and most likely answer to this crossword clue is the 7 letter word THINNED

I've seen this crossword clue in The Daily Telegraph
T
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N
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Buddy explains!

The straight part
We know that "diluted" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case diluted = thinned.
The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.
This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.

What does THINNED mean?

THINNED verb
  1. To make thin or thinner.
  2. To become thin or thinner.
  3. To dilute.
  4. To remove some plants or parts of plants in order to improve the growth of what remains.

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