Combine the sugar, corn syrup, and butter in a large microwave-safe bowl. Cook on high for 1 minute.
Stir, then cook for another 1 minute. Repeat 3 more times for a total of 5 minutes until the sugar mixture is hot and bubbling.
Stir in baking soda and vanilla, mixing well. The mixture will foam a bit, then subside.
Fill a large paper grocery bag with the popped popcorn, then pour the caramel over the popcorn in the bag, stirring a bit to coat. Don't worry about coating every piece of popcorn perfectly, just mix the caramel around a bit.
Fold the bag over, then place it in the microwave and cook on high for 1 minute.
Shake the bag well without opening it, then cook for another 1 minute.
Shake again, then cook for 30 seconds, shake, and cook for 30 seconds more.
Combine the granulated sugar and cinnamon in a jar and shake well, then sprinkle over the caramel popcorn. Shake to coat, then pour the popcorn onto a baking sheet lined with parchment paper to cool.