Where are you located? This species can be susecptible to fungi if overwatered.

Huh. That's interesting. We are in Western Colorado, high desert. I have been watering them once a week since they are newly planted (last year). The water would only have been at the roots, not on the trunk. Would fungii still be an issue?
I must say, it looks like fungii.
What would I do if that is true? WOuld the cold winter kill the fungii and I just water less next year?

Try some copper fungicide all over the affected growth and hit it hard again a week later. You are definitely overwatering it, based on your description. In the summer 1 to 2 times a week is about right for an unestablished plant, but these plants need to dry out between waterings. Once fall hits they don't need much water at all. These plants often get by in NM with no supplemental watering. Bear in mind that these are ditch (or in NM, arroyo) plants that see infrequent, but thorough, soakings in their natural habitat. Good luck. One thing to bear in mind is that new (this seasons) grow may turn black; that's normal. Older growth turning black is a bad sign. Good luck. One other thing. These are full sun plants. Shade could weaken them to allow disease to creep in.