In a large bowl, sift the powdered sugar to remove lumps, reserving a small amount for dusting your work surface.

Add the sweetened condensed milk and peppermint extract to the powdered sugar, mixing until a sticky dough forms. If it’s too wet, add more powdered sugar a tablespoon at a time.

Divide the dough into three portions. Leave one portion plain, and color the others red and green using gel food coloring. Knead until colors are evenly distributed.

Dust your work surface with powdered sugar. Roll each colored dough into thin ropes, about ½ inch thick.

Twist the red, green, and plain ropes together gently to create a candy cane effect.

Cut into 2-inch segments and shape into small rounds or discs.

Roll each peppermint in granulated sugar to coat.

Place on a parchment-lined baking sheet and let dry at room temperature for several hours or overnight until firm.