Add the marshmallows and 2 tbsp. of water in a large microwave-safe bowl and microwave them for 30 seconds. Stir and microwave again for 30 seconds, keep doing this until they are all melted and nice and smooth.
Sift the powdered sugar and then pour in about 6 cups of sugar with the marshmallows. Stir until combined and a tacky dough forms.
Add shortening to your counter or a silicone mat, also add shortening to your hands. Knead the fondant and add more of the powdered sugar as necessary. Keep kneading and adding powdered sugar until when you pull it apart it stretches a bit and then breaks.
Cut the fondant into as many pieces as you want different colors. Add some food coloring gel, make sure to use the gel, and knead the color into the fondant. Add some shortening to your hands, this will help them from getting stained with food coloring. Knead until you have a uniform color, add more as necessary to get a darker shade of that color.
The fondant can be used right away, but it tends to work better if chilled first. Lightly cover it with vegetable oil or shortening then wrap it in plastic wrap tightly and then place it in an airtight container. Chill in the fridge for about 12 hours. Take it out of the fridge and let it sit at room temperature for 10 to 20 minutes, then knead it until it gets soft and roll it out. Wrap the remaining tightly with plastic wrap and place in an airtight container, and store in the pantry for a few months. Enjoy!