Preheat the oven to 350°F. In a large mixing bowl, combine powdered sugar, butter, extract, and egg, beating until creamy. In a separate bowl, mix flour, baking powder, and salt; add to the wet mixture.
Incorporate Candy Cane Kiss crumbles, shape the dough into 1-inch balls, and roll in granulated sugar. Place on a cookie sheet, bake for 10-12 minutes, then quickly press a Hershey Kiss into the center of each cookie.