Place candy canes in food processor and pulse until they are completely crushed.

Combine powdered sugar, butter, extracts and egg in large bowl.

Beat wet ingredients until light & fluffy at medium speed.

Combine flour, crushed candy canes, baking powder and salt in a separate mixing bowl.

Add dry mixture to wet mixture and beat until well blended (mixture will be kind of dry).

Stir in chopped Candy Cane Kisses.

Shape dough into 1 inch balls; roll in granulated sugar.

Place dough balls 1-inch apart on cookie sheet.

Bake for 10-12 minutes in 350 degree oven until firm.

Remove from oven and immediately press a Candy Cane Kiss in the center of each cookie.

Place cookie sheet in refrigerator until ready to serve (keeps kisses from melting).