Preheat oven to 350°F. Make room in either refrigerator or freezer for your cookie sheet.
In a large mixer bowl, combine powdered sugar, butter, extracts and egg. Beat at medium speed, scraping bowl often until creamy (2-3 minutes).
In a separate bowl, whisk together flour, baking powder and salt. Add to wet mixture and beat, scraping bowl often until well blended (1-2 minutes). The mixture will be a bit crumbly. Stir in chopped Kisses.
Shape dough into ¾-inch to 1-inch balls; roll in granulated sugar. Place 1-inch apart on cookie sheet.
Bake for 10-12 minutes or until set. As soon as they come out of the oven, allow them to cool for 2 minutes. (Just enough to cool down, so they won't immediately start melting the Candy Cane Kiss when they touch the cookie.)
Once barely cooled, press a Candy Cane Kiss in the center of each cookie. They’ll crack a little around the edges, so just use your fingers to hold the cookie together while you set the kiss inside. Put cookie sheet (with cookies) immediately into the freezer (preferred) or refrigerator, so that the Kisses will set quickly. As soon as you press them into the cookie, they will begin to soften… so if you can get them into the freezer then they will keep their Kiss shape.
Store in a covered container- at room temperature for up to a week. In the freezer they should be good for a couple of weeks.