In the bowl of an electric mixer fitted with a paddle attachment, cream together the butter and cream cheese. Add the vanilla and powdered sugar and beat until the mixture forms a ball. Stir in the coconut and mix until combined.
Roll the mixture between your hands to shape the bite-size candies like potatoes. Place each ball on a parchment-lined backing sheet and chill for at least 30 minutes, until firm.
Place some cinnamon in a shallow bowl. Roll each ball in the cinnamon, coating the outside completely, so there are no white spots.