I did a bit more research and determined that XCP-ng was passing the USB device through to the guest OS, although either didn't have the right drivers for my z-wave USB stick, or otherwise didn't know what to do with it; so it always just passed it to the guest as a root hub.
I wasn't particularly interested in spending too much more time on it so I purchased the following PCI-E card and passed the whole controller through to the guest. That solved my problem and it has been working ever since.
https://www.amazon.com/gp/product/B00JFR2H64/ref=ppx_yo_dt_b_asin_title_o05_s00