Warmwater:
I dont believe your business has to be in CA.

for example: A Texas contractor may be awarded a job in CA, this does not mean they have to open an office in CA, they can apply for a license no matter where in the US they are located.

if you do a license search at www.cslb.ca.gov you will see many contractors do not have a california address.

Here is an example: http://www2.cslb.ca.gov/CSLB_LIBRARY/License+Detail.asp?LicNum=717695

-mike