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Start by making the toasted coconut rim. Add shredded coconut to a pan over medium-low heat on the stove. Cook, stirring often, until coconut is toasted, about 4-6 minutes, then pour toasted coconut on a plate and allow to cool for a few minutes. Use a lime wedge to wet the rim of the glass, then dip the rim of the glass in the toasted coconut, rolling from side to side until well coated. Repeat with the second glass.
Next, make the margarita. Add tequila, agave (or simple syrup), lime juice, coconut milk, and ice to a cocktail shaker. Cover tightly and shake for 15-20 seconds.
Divide the margarita between the prepared glasses and garnish with a lime wedge on the rim and freshly grated lime zest on the surface of the margarita. Cheers!