Place 1/4 cup of sugar with 2 tablespoons of water in a medium size saucepan. Heat over medium heat without stirring. The sugar will melt, then boil and will turn into a golden brown caramel. You don't want a dark caramel (that would be bitter), so as soon as the sugar has taken a nice golden color, carefully pour 1 cup of water into the saucepan. It will sizzle so be careful.

Add the remaining 1/4 cup of sugar and 1 cup of water. Bring to a boil and boil for about 1 minute, or until the caramel has melted and is combined with the water. This will be our caramel syrup. Let it cool completely.

To a glass bottle or large glass jar, add the vodka. Slice the vanilla bean in half and scrape off the vanilla seeds using the tip of a knife. Add the seeds to the vodka as well as the whole vanilla bean. Next, add the cinnamon sticks, caramel syrup, and vanilla extract. Stir to combine. Close with a lid and leave it at room temperature for at least 10 days, or up to 2 months. The flavors will merge and develop as it ages. You can then strain the liquor through a fine sieve to make it clear.

Enjoy as an appetizer with ice and orange peels, or use in cocktails!