Place candy canes in food processor and pulse until they are completely crushed.
Make sure you have room in your refrigerator or freezer for your cookie sheet.
Combine powdered sugar, butter, extracts and egg in large bowl.
Beat until fluffy at medium speed.
Combine flour, crushed candy canes, baking powder and salt in a separate bowl.
Add flour mixture to wet mixture and beat until well blended (mixture will be kind of dry).
Stir in chopped kisses.
Shape dough into 1 inch balls; roll in granulated sugar.
Place 1-inch apart on cookie sheet.
Bake for 10-12 minutes in 350 oven until firm up and set.
Remove from oven and immediately press a Candy Cane Kiss in the center of each cookie.
Place cookie sheet into the freezer or refrigerator to keep kisses from melting.