The materials for Kanai's cube you mention you'll get from doing bounties (complete all 5 bounties in an act to get a cache; you'll need a full run with caches from every act for the important recipes). Gear is usually acquired from drops, Kadala, and upgrading stuff in the cube, but it's all completely random.
That being said, the people in your group who have 20k weapons use cheated gear. GR150 is impossible to play "legit"; those guys hacked the game to have super overpowered gear. They will never find an upgrade ever (as their gear is 10 times better than the best non-cheated gear) and if you have received gear from them it's most likely cheated as well.
It sucks, but that's what console looks like - full of cheaters. Sorry for that. Before you ask: you can not lose your paragon anymore, it will stay with you forever. Those guys robbed you of the "gearing up experience".