Musty smells are common with fabric items, especially when they are in contact with moist, damp conditions. Whether a liquid spills inside of the bag and leads to musty smell or if you had the bag stored in a damp basement, you want to remove the smell so you can use the bag again. There are several things that will safely deodorize the canvas bag.
Fill a spray bottle with white vinegar and mist over the bag, both inside and out. Allow the bag to air dry. This should remove most, if not all, of the musty smell.
Sprinkle baking soda inside the bag and let sit overnight to absorb any excess odor or moisture. Shake the bag off outdoors the next day to remove the baking soda, and flip the bag inside out and sprinkle baking soda into the bag again. This will deodorize the outer fabric of the bag. Flip the bag right side out the next day and shake it to remove the excess baking soda.
Read the care instructions labels for your bag. If allowed, wash the bag in the washing machine using the recommended wash cycle. Often a warm wash cycle and tumble dry will safely clean and deodorize the bag without causing damage.