Coarsely chop graham crackers. In a large bowl, combine marshmallows, and red and green cherries; stir in chopped graham crackers. Add sweetened condensed milk and mix by hand until thoroughly combined.
Grease a glass 8x8-inch baking dish; sprinkle bottom with 1/4 cup coconut. Spread graham cracker mixture evenly in baking dish and top with remaining coconut. Refrigerate for at least 2 hours.
NOTE: Don't use graham cracker crumbs, they don't work, the recipe needs the coarsely chopped crackers.