The stone statue of the Old Master Cannoli is located inside the Secret Woods, in the very west.
The statue reads: "Old Master Cannoli... still searching for the sweetest taste...".
If you buy and grow a Rare Seed from the Traveling Cart (for 600g - 1000g) and then give the statue the resulting Sweet Gem Berry as you would give a present, the statue's eyes will turn red and it will give you a Stardrop.
This will only work one single time. After that, you won't be able to interact with it anymore.
The name Old Master Cannoli is a reference to the italian pastry cannolli siciliani.
