The Adamantine Bo Staff (19/30 proc: Lightning Storm) does actually proc on the target, not the wielder. The fact that the proc is a rain spell is why it damages you, as any shaman who's cast his poison rains too close to his target will know
My monk used to use the Bo Staff when fighting giant sized mobs as the collision radius for them is huge, you can hit them while being out of range of the rain when it goes off.
As for the cancel magic being 'beneficial', the spell in the spdat is marked as beneficial even though it behaves as a harmful spell when cast on mobs. The only weapon I know that procs this was the glowing black sword which procced on the wielder, I don't know of a weapon that procced CM on the target, but I've been out of the game for a year
It's possible it could proc a spell with the same name but different flags though (like the many versions of Avatar).
K.