Toast the shredded coconut in a dry skillet over medium heat for 2-3 minutes, stirring frequently until golden brown. Transfer it to a shallow plate to cool.
On a separate small shallow plate, add a small amount of cream of coconut. Dip the rim of the glass into the cream of coconut, then into the toasted coconut, gently pressing it so it sticks.
Into a cocktail shaker, add the tequila, cream of coconut, lime juice, Grand Marnier, and simple syrup. Add a large handful of ice and shake for 15 seconds, or until the shaker is frosty and cold.
Fill the prepared glass halfway with crushed ice and strain the coconut margarita mixture over top. Garnish with a lime wheel or extra toasted coconut and serve immediately.
Notes
Añejo Tequila: Gives this cocktail a deep and delicious flavor, but if you only have blanco or reposado tequila, those will work too.
Grand Marnier: Can be substituted for triple sec or Cointreau.
Light Simple Syrup: My light simple syrup uses half the sugar of regular simple syrup and is still just as delicious!
Toasted Coconut: Is completely optional, but adds a delicious nutty sweetness to the drink.
Serving a crowd? All you have to do to make a pitcher of margaritas is multiply the recipe and mix it in a large pitcher. Store it in the refrigerator until you are ready to serve and add ice only when serving the individual drinks to avoid dilution.