California-located, hilarious people working together (2,7)
I believe the answer is:
in cahoots
'working together' is the definition.
'california-located hilarious people' is the wordplay.
'california-located' becomes 'inca' (I can't explain this - if you can you should believe this answer much more).
'hilarious people' becomes 'hoots' (a hilarious person might be called a hoot).
'inca'+'hoots'='IN CAHOOTS'
(Other definitions for in cahoots that I've seen before include "what conspirators are" , "Associated with" , "Conspiring together" , "Thick" , "Conniving" .)