In a small bowl, sprinkle the gelatin into 2 tablespoons of cold water and stir. Set aside to let bloom.
Place the heavy cream, milk, sugar, and tarragon in a medium nonreactive saucepan and bring to boil. Immediately remove the pan from the heat, whisk in the gelatin, and let it bloom for 5 minutes.
Cover the pan and steep for 30 minutes.
Pour through a fine-mesh strainer into a bowl, pushing on the tarragon with a small ladle or spoon to extract all of its flavor.
Ladle the panna cotta liquid into 4-ounce ramekins or desired serving dishes and transfer to the refrigerator. Let cool until set.