Cracked Materia is only obtained if you have some 1.0 Armor with materia on it that you had on you at the time 2.0 was released. It simply broke all Materia, and only those pieces of "old gear" have cracked materia in them.
As of this moment, there is no way to obtain cracked materia anymore.
[XI] Surivere of Valefor
[XIV] Sir Surian Bedivere of Behemoth