You're confusing SoCal and the Central Valley here. Southern California (LA, San Diego, the Mojave Desert) doesn't have enough water. The Central Valley, fed by the Sacramento River from the Sierras and Cascades, and then extended south with canals, has plenty of water for agriculture. In fact, it was quite prone to flooding before we engineered the water shed.

All of which is irrelevant to the wine conversation, because the relatively dry climate is exactly what makes the Napa and Livermore valleys some of the best in the world to grow grapes. You've got good soil, dry summers allowing for control over how much water the grapes get that make them grow more flavorful, and very few frosts. The fact that the region gets almost all of their rainfall during the winter also helps avoid the grapes going to mold.

No, that's Colorado.