Other than the coarseness of the texture, there is no difference between cinnamon powder and ground cinnamon made from the same type of bark. Variations in odor, taste and nutritional value can occur between products made from different species of cinnamon trees.
Cinnamon is harvested from the inner bark of cinnamon trees, small evergreens that are part of the Lauraceae family. There are two types of cinnamon sold commercially. Cassia tree cinnamon, also known as Chinese cinnamon, is the type of cinnamon most commonly found in U.S. grocery stores. Ceylon cinnamon, often referred to as true cinnamon, is rarer and comes from trees native to Sri Lanka. Ceylon cinammon is lighter in color and not as strong in odor or flavor as Cassia.
While cinnamon has long been used in traditional medicine to treat symptoms like indigestion, gas and diarrhea, a recent meta-analysis of independent medical studies indicates that cinnamon used in moderation can lower blood sugar and cholesterol in humans. However, the analysis does warn against the over-consumption of Cassia cinnamon due to the significant volume of coumarin it contains. Coumarin is, a naturally occurring organic compound that has been found to cause liver damage if consumed in large amounts. Ceylon cinnamon contains only trace amounts of coumarin.