Beat butter at medium speed with an electric mixer until creamy. Add 1 cup powdered sugar, beating until light and fluffy. Add egg, lemon zest, and vanilla; beat until blended. Gradually add flour, beating until blended. Stir in cherries. Wrap dough in plastic wrap, and chill 2 hours.
Preheat oven to 375°. Shape dough into 30 (5- x 1/2-inch) ropes. Place 2 inches apart on ungreased baking sheets; bend over tops of ropes to look like candy canes.
Bake at 375° for 10 to 12 minutes or until edges of cookies begin to brown. Cool on baking sheets 2 minutes. Transfer to wire racks, and cool completely (about 20 minutes).
Whisk together cherry juice, food coloring, and remaining 1 1/2 cups powdered sugar in a small bowl until smooth. Drizzle over cookies.
This recipe is excerpted with permission from <a href="http://www.amazon.com/gp/product/0848739663/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0848739663&linkCode=as2&tag=craftfocom-20">"Christmas with Southern Living 2013: The Ultimate Guide to Holiday Cooking & Decorating"</a> by the Editors of Southern Living Magazine and published by Oxmoor House.