The Z-Stick Gen 2 is now working. I had to re-enable the usbabitrator daemon which I disabled to create an external USB data store.
First check that the host can see the Z-Stick Gen 2 USB device, execute the following from your ESXi console.
esxcli hardware usb passthrough device list
You should see something similar to this:
Bus Dev VendorId ProductId Enabled Can Connect to VM Name
1 2 658 200 true yes Sigma Designs, Inc. Aeotec Z-Stick Gen5 (ZW090) - UZB
1 3 59b 370 true yes Iomega Corp.
Enable the usbarbitrator daemon with the following command:
/etc/init.d/usbarbitrator start
I hope this helps others!