In a small bowl, sprinkle gelatin over cold water and let it sit for about 5-10 minutes to bloom.
In a saucepan, combine heavy cream, milk, and sugar. Heat over medium heat until the sugar dissolves and the mixture is hot, but not boiling.
Remove the saucepan from heat and stir in the bloomed gelatin until fully dissolved.
Add vanilla extract and mix well.
Pour the mixture into greased ramekins or molds and refrigerate for at least 4 hours or overnight until set.
To serve, unmold the panna cotta onto serving plates and drizzle with your favorite sauce, berries, or caramel.