place 1/2 cup coconut in each of 2 separate bags. set remaining coconut aside. add blue food coloring to coconut in one bag and red food coloring to coconut in second bag. seal bags; shake untill coconut is evenly tinted.

frost cupcakes with "cool whip" top with coconut, gently pressing coconut into coconut "cool whip" to secure.

insert licorice into tops of cupcakes.