Can a dropped packing peanut reach terminal velcoity?

In a vacuum

Yes it can. Terminal velocity isn’t a set speed. It is the point where an object is no longer accelerating. If you took a packing peanut to the top of a building for example and pushed it off the edge, it starts accelerating towards the earth. The resistance it feels falling through air will slow the rate of acceleration to the point where there is no more acceleration (no more change in velocity). That is the terminal velocity.

Following what @seawulf575 wrote, ... the terminal velocity is the velocity where air resistance exactly equals the force of gravity in the opposite direction.
Terminal velocity of a packing peanut will be very slow due to high surface-to-weight ratio, it weighs close to nothing but has a large drag through the air.
So, yes very easy for a packing peanut to reach terminal velocity.

What is the point of this question? Are you trying to find out if packing peanuts can be used as a weapon? My guess is that a falling packing peanut would be unlikely to hurt anyone, since it is made of soft material and would, I am guessing, not have a very high terminal velocity. You could test this hypothesis by dropping i them into a bucket of water from various heights and seeing how much of a splash they make.

This question should read, “At what height would a dropped packing peanut reach its terminal velocity”?

@gondwanalon Good re-statement “At what height would a dropped packing peanut reach its terminal velocity”?
I think you can do this at home, a packing peanut is probably close to reaching terminal velocity dropped from shoulder height to the floor.