Warning! This is not an inexpensive project! The last time I bought beans in bulk from New Day Grocery they were over $3 a piece. Once you get it going though, it's not a big deal to add a new bean once in a while as you use them up.
Being a non-drinker, I was a bit nervous about going into the liquor store. I grew up in California where liquor stores are not run by the state; they are just like the 7-Elevens on every corner and anyone can go in to buy gum, candy, etc. I must have looked very out-of-place, but as soon as I told the clerk what I was after, he pointed me in the right direction and said the cheapest vodka would be fine for my purposes. The vanilla beans are definitely not local, but it turns out the vodka I bought was made at The Old Monastery in Hood River, Oregon!
1 bottle (a fifth) vodka or bourbon
10 to 12 vanilla beans
Simply open the bottle and drop the beans into the vodka or bourbon. Cap tightly. Let the vanilla beans steep in the alcohol for at least a month. You can then decant the resulting vanilla extract into smaller, prettier glass bottles for gift giving. You can also use the beans to flavor Vanilla Bean Ice Cream, custard and the like.
Add additional beans and alcohol to the bottle as needed.