1. Prepare a baking sheet by lining it with aluminum foil and set aside for now.
2. In a large, heavy skillet, combine the water, sugar and peanuts over medium heat. Stir until the sugar is dissolved.
3. Continue to cook, stirring frequently, while the liquid reduces and becomes syrupy. After about 10 minutes, the mixture will turn grainy and the peanuts will look sandy.
4. Continue to cook and stir the mixture. The peanuts will get darker, and over time the grainy sugar will melt in spots and turn into syrup. It is important to stir frequently so that the peanuts do not burn and the sugar syrup gets evenly distributed.
5. Cook the peanuts until they are a deep golden brown or a light amber color. Do not worry if you still have grains of sugar clinging to the peanuts; this is normal and it gives the finished candy a delicious crunchy texture. When they are very near the desired color, add the salt and cinnamon, and stir several times. Remove the pan from the heat and add the vanilla and stir.
6. Scrape the peanuts onto the prepared baking sheet and spread them in a thin layer with your spoon. Allow them to cool, then break them into small pieces. Once the peanuts are completely cool, they can be packaged in an airtight container and stored at room temperature for several weeks.