Begin by popping the popcorn kernels. You can use an air popper for a healthier option or cook them on the stovetop in a pot with a lid. Once popped, transfer the popcorn into a large mixing bowl and set it aside.
In a medium-sized saucepan, melt the unsalted butter over medium heat. Once completely melted, add the granulated sugar, ground nutmeg, ground cinnamon, and salt. Stir the mixture continuously until it begins to gently boil.
Allow the mixture to boil without stirring for 3 to 4 minutes, or until it turns a light golden color. Keep a close eye on it to prevent burning. Once it reaches the desired color, remove the saucepan from heat and carefully stir in the pure vanilla extract.
Immediately pour the warm caramel mixture over the popped popcorn. Using a spatula or wooden spoon, gently toss the popcorn to ensure that each piece is evenly coated with the caramel.
Spread the caramel-coated popcorn on a baking sheet lined with parchment paper. Allow it to cool completely to set the coating.
Once the popcorn is cool, sift the powdered sugar over the top. Use a spatula or your hands to gently mix it in, ensuring an even distribution of sweetness.
If desired, sprinkle crushed candy canes over the popcorn for an added crunch and a pop of holiday cheer.
Break apart any large clumps of popcorn, then serve it in festive bowls or package it into gift bags for friends and family.
Notes
For an extra festive touch, add crushed candy canes on top.