Stir the sugar, butter, milk, vanilla ,peppermint extract and egg in large bowl. Mix until combined completely.
Mix the flour, baking powder and salt, mix into the butter mixture until completely combined.
Divide the dough into half. Take one half of the dough and place in a bowl and wrap it tightly with plastic wrap. This is the dough you leave white.
Take the remaining dough and divide into half again. Mix red food coloring into one half and green into the other, adding enough coloring until the desired shade of green/red has been reached. Place each color into a bowl and wrap it tightly with plastic wrap
Refrigerate the dough for at least 4 hours.
Preheat your oven 350°F. Line baking pans with parchment paper.
For each candy cane, shape one rounded teaspoon of dough from the white dough, and one from a red or green dough. Roll each into a 4 inch rope.
Place one colored and one white rope side by side and press lightly together at the ends, then twist.
Place on a pan lined with parchment paper and curve the top to shape into a cane. Repeat until the pan is full of cookies, placed one inch apart.
Bake 8-10 minutes until lightly brown on the bottoms. Do not overbake as the cookies will turn brown and ruin the color effect.
Remove from the oven and cool on the cookie sheets completely to let them set, or the shape will break.
Store in a closed container at room temperature for up to 5 days or freeze for up to 3 months.