Alternatively, water could be brought to where California is, now that the Colorado River isn't enough.
The obvious way is to tap the nearby Pacific -- through desalinization.
Stumbling block: we'd need a really cheap energy source.
Fortunately, there's a California start-up close to commercializing low-energy nuclear reaction (LENR) technology, formerly known as cold fusion. How about pumping a few billion in to this and related efforts? Really cheap compared to the trillions, easily, it would take to dig up the whole state and cart it elsewhere.