Line an 8×8 inch square baking pan with parchment paper, leaving a slight overhang on the sides. Lightly grease the parchment with a tiny bit of butter or oil to ensure the marshmallows don’t stick to the edges.
In a large heavy-bottomed saucepan over medium-low heat, combine the chocolate chips, sweetened condensed milk, and butter. Stir constantly with a heat-resistant spatula to prevent the chocolate from scorching. Continue heating until the mixture is completely smooth and the chocolate has fully melted into the milk.
Once the mixture is smooth, whisk in the unsweetened cocoa powder, alcohol-free vanilla extract, and salt. Remove the pan from the heat immediately after these ingredients are incorporated.
Let the chocolate mixture cool for about two minutes so the marshmallows do not melt completely. Gently fold in one cup of the mini marshmallows.
Pour the mixture into your prepared baking pan and spread it evenly with a spatula. Press the remaining half cup of mini marshmallows and the crushed peppermint candy canes firmly into the top of the fudge.
Place the pan in the refrigerator for at least three to four hours, or until the fudge is completely firm. Once set, use the parchment paper overhang to lift the fudge block onto a cutting board. Use a sharp knife dipped in hot water and wiped dry to slice the fudge into 24 even squares.
