Candy Canes can be used at the Black Market shop in the hub area to purchase various themed gear, tools, and accessories. The Black Market NPC is located directly in front of the Curse Market NPC ...

The Winter Chests will drop random items so the Candy Canes are more reliable if you farm them. Use Candy Canes at the Black Market NPC in Zen Forest HUB to buy all items from the Winter Update.