Hi Julie,
Thank you for your question about your manzanita plants.

From your photos it is possible that your plants may have mealybugs. The following link provides information about Mealybugs: Managing Pests in Gardens: Invertebrates: Mealybugs—UC IPM (ucanr.edu)

To be certain, I recommend that you take your photos and a sample cutting of the damaged area of your plant to the OSU Deschutes County Extension office in Redmond. The Extension office is located at 3800 Airport Way, Bldg 4. The horticulture staff can identify what is causing the damage on your plants and make recommendations for management.

If you need additional information, you can call the Deschutes County OSU Extension office in Redmond at<personal data hidden>. Ask to speak with Amy Jo Detweiler, a member of the Horticulture Staff. Amy Jo welcomes your home garden questions and is a great resource.