Essential to the formation of benzophenanthridine alkaloids in the response of plants to pathogenic attack. Catalyzes the stereospecific conversion of the N-methyl moiety of (S)-reticuline into the berberine bridge carbon of (S)-scoulerine. (S)-reticuline + O2 = (S)-scoulerine + H(+) + H2O2 Binds 1 FAD per subunit in a bicovalent manner. Alkaloid biosynthesis; (S)-scoulerine biosynthesis; (S)-scoulerine from (S)-reticuline: step 1/1. Found in cytoplasmic vesicles that are highly specific and unique compartments serving only alkaloid biosynthesis. The protein composition of these vesicles reveals the presence of only about 20 separable proteins. The FAD cofactor is bound via a bicovalent 6-S-cysteinyl, 8alpha-N1-histidyl FAD linkage. Belongs to the oxygen-dependent FAD-linked oxidoreductase family.