1Heat oven to 350°F. Grease bottoms only of 2 (8-inch) round cake pans with shortening or cooking spray.
2Make cake batter as directed on box. Divide batter in half. Stir 4 drops green food color into one half; stir 4 drops red food color into other half. Pour into pans. Bake as directed on box for 8-inch rounds. Cool 10 minutes. Run knife around sides of pans to loosen cakes; remove from pans to cooling rack. Cool completely, about 1 hour.
3Place each cake layer on serving plate. Frost cake rounds completely with white frosting. To decorate like ornaments, place 1 candy at top of each cake; bend licorice pieces to look like hooks. Insert licorice into top of each candy. Decorate each ornament as desired using red and green decorating gels. Store loosely covered at room temperature.