Measure cereal and place in an extra-large bowl; set aside.
Place candy melts, peanut butter, and butter in a microwavable bowl. Heat on HIGH for 1 minute, stir. Heat for an additional 30 seconds, or until smooth, and stir to combine.
Stir in the vanilla and food coloring.
Pour mixture over the cereal and stir until evenly coated.
Place 3/4 cup of powdered sugar in a one gallon freezer bag.
Add 1/2 of the cereal mixture, seal the bag and toss to coat.
Pour mixture out onto a silpat or wax paper lined baking sheet.
Repeat with the remaining mixture and sugar.
Sprinkle M&M's over Puppy Chow and toss to combine.
Serve once cooled. Store in an airtight container in the refrigerator.
I used Rice Chex® because those are my favorite, but use whatever version your family likes the best.
I was hoping that the green candy melts would not be overpowered by the peanut butter, but that didn't work out so well...surprise, surprise. So I ended up adding AmeriColor Leaf Green gel color to achieve a deep Grinch green color.
The "official" recipe calls for a 2-gallon bag, but I have never seen one of those in the grocery store! We have always made ours in a 1-gallon bag and it works just fine. ;)
The M&M's will not stick to anything, they are just there to look festive.
I added Lime Green Jimmies, but they just disappeared into the powdered sugar so they were left out of the final recipe, lol.