Using a citrus zester, remove peel from orange in long narrow strips (save fruit for another use). In a large saucepan, combine honey, water and orange peel; cook and stir over medium heat just until simmering (do not boil). Cool 20 minutes.
Transfer to a small bowl; stir in cranberries. Refrigerate, covered, 8 hours or overnight.
Drain cranberries, allowing berries to stand 15 minutes. Discard orange peel and cooking liquid.
Place sugar in a small bowl. Add cranberries, a few at a time, and toss to coat. Transfer to a parchment-paper lined baking sheet. Let stand until completely dry, about 30 minutes. Store, covered, at room temperature for up to 3 days.
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