Prepare your baking sheet by lining it with parchment paper.
In a large saucepan, melt the butter over low heat. Once melted, add the mini marshmallows and stir until fully melted and smooth.
Remove from heat and add the vanilla extract and a few drops of green food coloring. Stir until the mixture is evenly tinted.
Quickly add the rice cereal to the melted marshmallow mixture. Stir until the cereal is fully coated.
Using buttered hands or a buttered spatula, press the mixture into a flat layer on the prepared baking sheet, about 1 inch thick.
Allow the mixture to cool for about 10 minutes, then use the tree-shaped cookie cutter to cut out Christmas tree shapes.
In a separate bowl, combine the powdered sugar and milk to create a thick icing. Adjust the consistency as necessary with more sugar or milk.
Dip the tops of the rice crispy tree shapes in the icing, allowing the excess to drip off.
While the icing is still wet, sprinkle crushed peppermint candies over the top for decoration.
Insert a pretzel stick at the base of each tree to serve as the trunk.
Place a star candy on the top of each tree for the finishing touch.