Air popper: Use an air popper to pop the 1/2 cup of popcorn kernels according to the manufacturer’s instructions.
Microwave: Alternatively, place the popcorn kernels in a brown paper bag, fold the top over a few times to seal it, and microwave on high for 2-3 minutes or until the popping slows to about 5 seconds between pops.
Place the red, white, and blue candy melts in separate microwave-safe bowls. Microwave each bowl for 1 minute, stir, and continue microwaving in 30-second intervals, stirring in between, until fully melted. Transfer each color to a separate small piping bag or a zip-top bag with a tiny corner snipped off for drizzling.
Spread the popped popcorn on a large baking sheet lined with parchment paper. Drizzle the melted red, white, and blue candy melts over the popcorn in a back-and-forth motion.
While the candy is still melted, sprinkle the M&Ms and decorative sprinkles evenly over the popcorn to ensure they stick.
Allow the candy melts to harden at room temperature, which should take about 15-20 minutes. You can also place the tray in the refrigerator for about 10 minutes to speed up the hardening process.
Once the candy has set, break the popcorn into clusters. Serve in a large bowl or distribute into individual serving bags for a party.