Catalyzes the conversion of N-methylated protoberberine alkaloids N-methylstylopine and N-methylcanadine into protopine and allocryptopine, respectively, in the biosynthesis of isoquinoline alkaloid sanguinarine. (S)-N-methylcanadine + O2 + reduced [NADPH--hemoprotein reductase] = allocryptopine + 2 H(+) + H2O + oxidized [NADPH--hemoprotein reductase] Alkaloid biosynthesis. Belongs to the cytochrome P450 family.