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Toast rice and cinnamon. Place rice and canela in a large, dry cast iron skillet or frying pan and toast over high heat until rice is golden and cinnamon is fragrant, about 10 minutes. Stir occasionally in the beginning and then constantly as the rice starts to toast to prevent burning.
Soak. Transfer rice and canela to a large heatproof bowl. Add a pinch of salt. Pour 3 cups boiling water over rice and let soak 30 minutes.
Blend. Pour rice mixture into a blender (you may need to do this in batches depending on the size of your blender). Add 3 cups of cold water, vanilla extract and the can of sweetened condensed milk. Blend, starting blender on low, then gradually increasing speed to high until mixture is completely smooth, about 1 minute.
Strain. Pour mixture through a fine mesh sieve into a large bowl. If you want the horchata super smooth line it with a piece of cheesecloth first. Stir rice mixture scraping the bottom of the sieve until all that is left is the rice residue. Discard.
Add milk. Stir in the cold milk and taste. Add up to another ½ cup of sweetened condensed milk depending on how sweet you like it. Remember it won't taste as sweet once it is cold.
Serve. Pour horchata into a pitcher and chill. Give another stir before serving in glasses over ice. Sprinkle each glass with a bit of ground cinnamon.