The year is 2095.
The birth of Cal-Mexico was a result of the Second Mexican War / La Intervención Segunda de Los Estados Unidos de 2034, a quickly cascading series of events which began with the legalization of marijuana in Mexico in 2030, escalating until the Battle of Tijuana in 2033. ICE officials were surrounded by the combined forces of the San Diego and Tijuana PD. In less than 18 hours, California announced its independence and Mexico invited it into the strongest possible alliance with extensive trade agreements, open border, and commitment to each other's defense. The skeleton crew still at Edwards Air Force Base held their ground for a year, but the US never mustered much of a military response, embroiled as they were in so many other international conflicts, secessions, and natural disasters.
California's new official name is the Independent Republic of California but everyone outside of the state calls it Cal-Mexico. It’s not quite a friendly term. California's relationship with Mexico is strong, but not easy, and there are constant negotiations and embroilments over exports and imports and labor laws, which Mexico promised to bring up to California's standards at the time of the alliance but which is still not completely accomplished. The PRI runs candidates in California and they have a significant political minority in a multi-party parliamentary system, but none of the other political parties from Mexico have made much of an attempt to cross over.
Cal-Mexico has prospered in the Great Challenge by reverting back to a low-water-demand agricultural base while maintaining a commitment to developing as much sustainable energy as possible. The grid only exists to support the most remote communities, but in the cities and bigger towns, zoning laws have evolved to mandate garden zones and compost zones, and each house is required to maintain a tax-deductible small-scale energy generation and distribution system - a solar/wind/bio suite of low-impact technologies - in the same way houses were required to hook up to the grid in the 20th and early 21st century. Houses in garden zones are required to have gardens, but it is still possible to buy a house or rent an apartment in a non-garden zone. A garden is also tax deductible.
After a 27-year drought, California agriculture has reverted back to less thirsty stone-fruit orchards, wheat, hemp, and marijuana. The Salinas Valley is the breadbasket of the region and Salinas (official name: Las Ciudades Unidas de Salinas y Monterey) is a powerful city in the new nation, 10 miles from the coast. It's easy to find good jobs in building the new seawalls rising up everywhere. National law forbids anyone from owning more than 150 acres, and anyone with a sound business plan and at least two years of agricultural apprenticeship can apply to homestead land that needs a lot of TLC to return to productivity.
Clean water runs from the taps, but low-flow technologies keep use to a minimum, and the water shuts off completely every night from Midnight to 4AM. Lawns were never made illegal but they make one look very unpatriotic and have fallen completely out of fashion, especially after the Hanson Rebellion.
Every child is required to join the Young Firefighters/Bomberos Jovenes at the age of 5, a scout-like organization in childhood that culminates in two years of service in firefighting at the age of 18. The indoctrination tactics used on young boys to keep them from experimenting with fire are quite controversial and many say go too far, especially because girls are not required to participate. Arson is punishable by exile beginning at 16.
Everyone is bilingual.
When the land was seized from the biggest growers in the redistribution following the 150-Acre Act of 2076, there was nearly another War of Yanqui Intervention, avoided only when the self-styled Colonel Hanson, leader of the US-supported large landowner militia and its rabble of violent supporters, was offered nearly half the treasury to leave peacefully. He did, taking many of his supporters with him, where they were welcomed with open arms to settle in the Christian Republic of Idaho (whose ag-tech spies, they say, are everywhere).
In 2095, California is as peaceful and prosperous as it can be on a warming, troubled planet. The wheat grows tall in Salinas.