In a blender, combine the fresh key lime juice, coconut milk, honey (or agave syrup), water, and vanilla extract. Blend on high until the mixture is smooth and well combined. This ensures that the ingredients are evenly distributed and the popsicles have a consistent flavor.

Taste the mixture and adjust the sweetness if necessary by adding more honey or agave syrup. Remember that freezing can dull sweetness, so it should be slightly sweeter than you want the final popsicles to be.

Carefully pour the popsicle mixture into the popsicle molds, leaving a little space at the top for expansion as they freeze. This prevents overflow and mess.

Insert the popsicle sticks into the molds, ensuring they are centered. If your molds have a lid, place it on top to hold the sticks in place.

Place the filled molds in the freezer and freeze for at least 4 hours, or until completely solid. This duration allows the popsicles to freeze thoroughly, ensuring they hold their shape when removed.

To remove the popsicles from the molds, run warm water over the outside of the molds for a few seconds. This helps loosen the popsicles without melting them.

Gently pull on the sticks to release the popsicles. Serve immediately and enjoy the refreshing taste of key lime!