Finely chop or grind the dried lavender into a fine texture.
If you are using food coloring, stir one small drop each red and blue food coloring into the ½ tsp water.
Mix the lavender into the sugar and stir in the water and vanilla extract until it is evenly distributed and the sugar is the texture of damp sand.
Pack the sugar into your sugar cube molds, using your fingers to press the sugar into each mold until firmly packed. The more firmly packed the sugar, the better the integrity of the final cubes.
Allow the sugar cubes to dry and set, uncovered, at least 8 hours or overnight.
When the cubes are set, gently pop them out of the molds and store them in a cool, dry place until ready to use.
Serve as a replacement for sugar in any application, such as with coffee or tea.