You are not likely to get arrested for the discussion you describe, but it is not legal to buy food stamps from someone and you could have been arrested if you had actually made that deal. It would further be illegal to use the food stamps that you bought from her. You might as well give her money as a gift rather than offer a transaction like that.
Threatening to call the police if you dont' give her money may constitute criminal extortion on her part.
Your best bet is to put this behind you and quit talking to this person before you get yourself in real trouble.
You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.
Any fraud, misuse, waste, or abuse of the food assistance program could result in loss of future benefits and criminal charges of fraud or theft.