If desired, soak the tapioca pearls in cold water for 15–20 minutes, then drain.
In a medium saucepan, pour in the milk, add the granulated sugar, cinnamon stick, and lemon peel.
Heat over medium, stirring occasionally, until the milk is just about to simmer without boiling.
Add the drained tapioca pearls, reduce heat to medium-low, and cook, stirring constantly, for 15–20 minutes until the pearls turn translucent and the mixture thickens.
Remove the pan from the heat, discard the cinnamon stick and lemon peel, then stir in the vanilla extract.
Serve warm or chilled. To serve chilled, divide into individual bowls, let cool to room temperature, then refrigerate for at least 2 hours.
Store any leftovers in an airtight container in the refrigerator for up to 3 days.