Mix the cup of sugar, milk, butter, vanilla, peppermint extract, flour, baking powder, and egg in a large bowl.
Divide the dough in half.
Add red food coloring to half the dough and refrigerate both halves for two hours.
Preheat oven to 375 degrees Fahrenheit.
Mix the crushed peppermint candy and 2 tablespoons of sugar in a small bowl.
Shape cookies by forming a teaspoon of each dough into 4-inch ropes (roll dough on floured surface.) Place one red and one white rope side by side and twist together. Bend top of cookie over to form curve of cane.
Place cookies several inches apart on cookie sheet and bake for 9-12 minutes. Sprinkle peppermint candy mixture over baked cookies and let cool (30 minutes.)