Candle lantern is a light source item in The Witcher 3: Wild Hunt, alternative to the torch and added with the "next-gen" Patch 4.0.
It can be found attached to the support beam frame at the entrance to the nekker monster den cave northwest of Hanged Man's Tree and southeast of the Border Post. The item appears in the "Weapons" inventory tab.
Prior to the next-gen patch, it was originally meant to be a quest item and while fully implemented into game, there was no way to get it without the use of console commands or mods.
Despite what the description says it doesn't really produce better light than a torch does and it only emits light in the front. However, it does appear to be brighter, but the range of view is pretty much the same. Like the torch it will also ignite flammable material such as swamp gas, if Geralt steps into it while holding it.