Line a baking sheet with parchment paper and dust lightly with cornstarch.
In a small bowl, combine gelatin and 1/4 cup cold water. Stir briefly and set aside to bloom.
In a medium saucepan over medium heat, combine sugar, corn syrup, 1/4 cup water, butter, and salt. Stir occasionally until sugar dissolves completely.
Insert a candy thermometer and continue cooking without stirring until the mixture reaches 250°F (hard-ball stage).
Remove from heat and carefully stir in the bloomed gelatin until completely dissolved
Add Kool-Aid powder and vanilla extract, stirring until fully incorporated.
Allow the mixture to cool slightly until it can be handled safely but is still pliable.
Dust your hands with cornstarch and pour the mixture onto the prepared baking sheet. Let it cool just until you can handle it comfortably.
Once cool enough to handle, dust with more cornstarch and begin pulling and stretching the candy like taffy until it becomes opaque and develops a glossy sheen
Divide the candy into portions and roll each piece between cornstarch-dusted hands into rope shapes of desired thickness.
Allow the licorice ropes to cool completely on parchment paper dusted with cornstarch, about 2 hours.
Once completely set, store in an airtight container with parchment paper between layers to prevent sticking.