The circus has long been known for providing hungry patrons with pink lemonade and peanuts for sale. “Circus peanuts” became a popular name, just like “ballpark hot dogs.”
 
The candy called “circus peanuts” is made of marshmallow and usually given a banana flavor, all made into the shape of a peanut. The name “circus peanuts” is cited in print since at least 1920, although the marshmallow candy is probably much older under different names. The Spangler Candy Company (Bryan, OH) applied for a “circus peanuts” trademark, with a first use date of 1950.
 
The inventor of the product (under the name “circus peanuts” or some other name) is not known.
 
 
Wikipedia: Circus peanuts
Circus Peanuts is a peanut-shaped marshmallow candy. Although the most popular variety of mass-produced Circus Peanuts today is orange-colored with an artificial banana flavor, confectioners originally distributed an orange-flavored variety that was only available seasonally due to a lack of packaging capable of preserving the candy; in the spring, five-and-dimes sold Circus Peanuts as penny candy. In the 1940s, Circus Peanuts became one of the many foods to become available year-round owing to the industrial proliferation of polyethylene packaging.
 
Today, mass-produced Circus Peanuts are made from sugar, corn syrup, gelatin, soy protein, food coloring and artificial flavor. Over the years, confectioners have also offered Circus Peanuts colored yellow, pink, and white, including a variety of flavors, though orange is still the most predominant color and banana the most common flavor, by far. The leading producers of Circus Peanuts are Melster Candies, Spangler Candy Company, and Brach’s, but they produce an essentially identical product. Circus Peanuts sold in generic label bags in retail stores such as convenience stores, grocery stores, and drug stores are almost always manufactured by one of the three candy companies listed above, simply sold in a generic package. Publix stores sell generic Circus Peanuts under their own label, but they are manufactured by Farley and Sathers.
       
13 April 1920, Cobb County Times (Marietta, GA), pg. 4:
CIRCUS PEANUTS
You know those little packages of peanuts that you get nowadays for five cents? Well those you got at the circus yesterday weren’t much bigger than the average run—but how much better they did taste!
 
Circus peanuts and pink lemonade has always tasted just a little bit better than any peanuts and lemonade you could get anywhere else—even if you don’t care to eat or drink any more of the kind for a year.
 
23 July 1920, Sheboygan (WI) Press, pg. 6, col. 4 ad: 
Marshmallow Circus Peanuts, lb. at ... 49c
(Sell. Bros. Co.—ed.)
 
2 July 1927, Freeport (IL) Journal-Standard, pg. 16, col. 4 ad:
Circus Peanuts
10c for 1/2 pound
Mashmallow Banana flavor
(Wagner’s Confectionery—ed.)
 
Google Books
Chain Store Age
Volume 7
1931
Pg. 48 ad:
Marshmallow (Circus) Peanuts
(Brandle & Smith Company—ed.)
 
2 August 1933, Carroll (IA) Daily Herald, pg. 6, col. 1 ad:
BRACH’S DELICIOUS
Circus Peanuts
Delicious fresh, tender banana flavor, marshmallow candy.
Extra Special
15c Pound
5c Steinful
(The F and R 5c to $1 Store—ed.)
 
28 May 1935, Canton (OH) Repository, pg. 17 ad:
19c Marshmallow Circus Peanuts; Fresh Shipment, lb. 14c
(Stark Dry Goods—ed.)
     
16 May 1941, Omaha (NE) World-Herald, pg. 19, col. 4 ad:
Marshmallow
CIRCUS PEANUTS
1-Lb. Bulk…9c
Rich banana flavor. Fresh, tender.
(Walgreen’s—ed.)
 
Google Books
Your Child Is Asleep;
Early infantile autism: etiology, treatment, parental influences
By Austin M. Des Lauriers and Carole F Carlson
Homewood, IL: Dorsey Press
1969
Pg. 231:
Of all the kinds of candies which we offered her, her favorite was banana candies (circus peanuts) which were attractive to her, not only because they smelled good and tasted fine, but also because she could see them and grasp them ...
 
USA Today
In candy world, circus peanut is a riddle wrapped in marshmallow inside orange shell
Updated 10/20/2006 2:39 PM ET
By John Seewer, The Associated Press
(...)
No one knows how circus peanuts got their shape and name or how they long they’ve been around. One theory is that they originated with the traveling circuses where vendors sold salted peanuts and candy.
 
By all accounts, circus peanuts date to the 1800s when they were a seasonal treat and one of the original penny candies.
 
“There are few candies that actually have survived as long as circus peanuts,” says Jon Prince, owner of wholesale candy retailer http://www.candyfavorites.com. “It’s not so much candy as it’s Americana.”
 
Spangler, which is celebrating its 100th anniversary and is best known for Dum-Dum lollipops and candy canes, has been producing circus peanuts since the 1930s in northwest Ohio.
 
(Trademark)
Word Mark CIRCUS PEANUTS
Goods and Services (ABANDONED) IC 030. US 046. G & S: candy. FIRST USE: 19500000. FIRST USE IN COMMERCE: 19500000
Mark Drawing Code (1) TYPED DRAWING
Serial Number 74475418
Filing Date January 3, 1994
Current Filing Basis 1A
Original Filing Basis 1A
Owner (APPLICANT) Spangler Candy Company CORPORATION OHIO 400 North Portland Bryan OHIO 43506
Attorney of Record Michael A. O’Neil
Type of Mark TRADEMARK
Register PRINCIPAL
Live/Dead Indicator DEAD
Abandonment Date October 18, 1995