Line a 8×8 inch baking dish with plastic wrap and spray with non-stick cooking spray. Set aside.
Place ⅓ cup of water in the bowl of an electric mixer fitted with the whisk attachment, and sprinkle gelatin on top of cold water to soak. This is will take about 5 minutes.
While gelatin is soaking, in a medium size sauce pan, combine ⅓ cup of water, corn syrup, and sugar. Do not mix, and bring the mixture to a roaring boil over medium heat. Let the mixture boil for 2 minutes. Make sure the sugar dissolved.
Turn the stand mixer onto medium speed and carefully pour the hot sugar mixture into the gelatin mixture. This should take about 1-2 minutes. Once the sugar mixture is added, beat on high for 12 minutes, until the mixture is fluffy and forms stiff peaks. Add in vanilla extract and beat on low until just combined.
Pour the marshmallow mixture into the prepared baking pan, using a greased spatula to smooth the top.
To cover the top, lightly spray the top of the marshmallow with cooking spray, lay a piece of plastic wrap on top making sure it completely covers the top. Press down the top to lightly seal candy.
Allow the marshmallow candy to rest for at least 4 hours or overnight. With cooking spray, spray clean scissors and cut the marshmallows into squares. You can make them however big or small you want. Then dredge the marshmallows lightly in the colored sugar mixture. You can also dip the marshmallow in melted white or dark chocolate and sprinkle with some extra sprinkles. Store in an airtight container, or if you are like me, eat them right away!