Sprinkle gelatin over 1/2 cup cold water in bowl of a heavy-duty electric stand mixer.
Stir together granulated sugar, next 2 ingredients, and 1/2 cup water in a 4 1/2-qt. saucepan over medium-high heat; cover and cook 3 minutes, bringing to a boil. Uncover and boil, stirring often, until syrup thickens and a candy thermometer registers 240° (about 8 to 12 minutes; lower heat as necessary to prevent mixture from boiling over).
Gradually add hot sugar mixture to gelatin mixture, beating mixture at low speed, using whisk attachment, 30 seconds or until blended. Increase speed to high (cover bowl with a towel to prevent splattering); beat 10 to 12 minutes or until mixture cools to room temperature and is thick but still pourable.
Whisk together cornstarch and powdered sugar. Dust a buttered 13- x 9-inch baking dish with 1 Tbsp. cornstarch mixture. Pour gelatin mixture into prepared dish; smooth with a lightly greased spatula. Dust with 1 1/2 Tbsp. cornstarch mixture. Cover remaining cornstarch mixture tightly, and reserve. Let marshmallow mixture stand, uncovered, in a cool, dry place 8 to 14 hours or until dry enough to release from baking dish and no longer sticky.
Invert marshmallow slab onto cutting board; cut into squares (about 1 inch each). Toss squares in reserved cornstarch mixture to coat. Store marshmallows in an airtight container at room temperature up to 2 weeks.
*Cane syrup may be substituted.
Test Kitchen Tip: Brush or rub a 1-inch border of 1 tsp. vegetable oil around the top of saucepan to prevent sugar from boiling to the top.